Heads Up: You Need A New Investment Advisor


&l;p&g;&l;img class=&q;dam-image shutterstock wp-image-1063889183 size-large&q; src=&q;https://specials-images.forbesimg.com/dam/imageserve/1063889183/960×0.jpg?fit=scale&q; alt=&q;Know your financial advisor&q; data-height=&q;640&q; data-width=&q;960&q;&g; Shutterstock

Recently, I have had some issues with an investment advisor. It has been an absolutely frightening experience, and one in which I wish I had trusted my gut, or at least had the knowledge shared by the experts I&s;ve spoken to. So, what are the telltale signs that it&s;s time for a change?


Here are 5 important warning signs.

&l;strong&g;Be Familiar&l;/strong&g;

First and foremost make sure your advisor knows you before they make recommendations.&a;nbsp; They need to understand your age, tax bracket, family situation, and above all your risk tolerance.&a;nbsp; Be super clear that their recommendations are in line with where you are in life.

&l;strong&g;No Law Breakers&l;/strong&g;

&q;Beware if your&a;nbsp;advisor recently broke the law, was the subject of a&a;nbsp;lawsuit from a&a;nbsp;dissatisfied client, or paid a&a;nbsp;fine for securities violations without admitting or denying wrongdoing,&q; said&a;nbsp;&l;a href=&q;http://www.gordon.edu/graduate/finance&q; target=&q;_blank&q;&g;Alexander S. Lowry&l;/a&g;,&a;nbsp;Executive Director,&a;nbsp;Master of Science in Financial Analysis at Gordon College.&a;nbsp;You can find this information by checking your advisor&a;rsquo;s Form ADV, their Form U-5 or&a;nbsp; go to the SEC&s;s website AdvisorInfo portal&a;nbsp;and type in their last name. You can also go to the Financial Regulatory Authority&s;s website, where another online database allows you to search for information on your advisor&a;rsquo;s disciplinary history.


&l;strong&g;Switching Products&l;/strong&g;

&l;!–nextpage–&g; If your financial advisor recommends a great new product and then suggests replacing it with something new and improved a few months or years later, be suspicious. Generally that means New policy, new commission, suggested&a;nbsp;&l;strong&g;&l;span style=&q;font-weight: 400&q;&g;Christina Povenmire, CFP, MBA, is a fee-only financial planner and founder of &l;a href=&q;http://www.cmpfinancial.com/our-team/christina-povenmire/&q; target=&q;_blank&q;&g;CMP Financial Planning&l;/a&g;.&a;nbsp;&l;/span&g;&l;/strong&g;


&l;strong&g;No Stupid Questions&l;/strong&g;

For a majority of people, like me, financial investments are not a strong suit so your financial advisor should be willing to speak to you in layman&s;s terms. If they talk in investment jargon it can be intimidating and they know it. Don&s;t be ashamed to ask a lot of questions. Dig as deep as you need to in order to understand exactly how and where they are investing your hard earned money. There is nothing to be ashamed of.

&l;strong&g;Get a Second Opinion&l;/strong&g;

If you don&a;rsquo;t feel confident about your advisor, trust your gut, and get a second opinion. There&a;rsquo;s no obligation to start a new relationship and any good fiduciary advisor will provide a complimentary assessment. &q;It is a good practice to employ once every few years,&q; suggests Michael Tanney, Co-Founder of NYC-based &l;a href=&q;http://www.wanderlustwm.com&q; target=&q;_blank&q;&g;Wanderlust Wealth Management&l;/a&g;. &q;Use the findings to ask your current advisor. Judge the advisor&a;rsquo;s answers based on honesty, integrity, and transparency. This is a great exercise that conveys to your advisor that you are watching closely and are no longer uninformed about your choices going forward.&q; It&s;s an excellent benchmark to ensure a better performance out of your existing relationship or know with certainty that it is time to move on.


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