In today’s challenging economic climate with mine fields of financial schemes, a trusted financial adviser has become more important than ever. So local professionals recommend doing your homework to find a reputable one.
“The challenge is deciphering the 'alphabet soup' of credentials advisers have,” notes Maurice Quiroga of PNC Bank.
To overcome this obstacle, Quiroga suggests taking a strong look at the adviser’s experience—not just the lengthy list or lack of designations behind their name. “Base your decision on a face-to-face meeting. Talk about their character and ask how many decades of experience they have,” he notes. “As a consumer, ask yourself, Do I like the person I’ve spoken to?”
Steve Green of OPTIMUM Wealth Management agrees clients should interview potential advisers in person. He recommends asking:
• How long has the adviser been in the business?
• How much money does the adviser manage for how many clients?
• What is his or her investment philosophy?
Additionally, Green emphasizes inquiring about where clients’ financial assets are held. “It’s important they are in the custody of large companies, such as Charles Schwab or Merrill Lynch. Financial schemes and problems can happen with independent advisers.”
Green also warns consumers to steer clear of advisers who create their own statements or present lofty promises. “If they’re promising things that are unrealistic, I would be skeptical.” Quiroga suggests checking the Financial Industry Regulatory Authority’s website, finra.org, to research their career background and find any history of fraud or fund mismanagement.
Clients also should be aware of what type of relationship the adviser has with them. Fiduciary advisers must put the client first, whereas suitability advisers must take appropriate actions—but those actions do not have to be in the client’s best interest, Quiroga says.
Overall, he notes that a financial company should have the depth of staff and resources, as well as the third-party assets, to properly and strategically handle clients’ investments in the ever-changing economic climate. “Families spend a lifetime building their savings, buying a home and retiring, so choosing the right financial adviser is vital.”
• CFP, a certified financial planner, has met the required experience and educational specifications of the Certified Financial Planner Board of Standards, sworn to abide by the specified codes of ethics and passed a national test administered by the board.
• ChFC, a chartered financial consultant, is designated by the American College at Bryn Mawr, an institution of higher learning sponsored by the insurance industry, upon completion of experience requirements and an exam.
• CFA, a chartered financial analyst, has passed the Institute of Chartered Financial Analysts’ exams in economics, portfolio management, security analysis, financial accounting and standards of conduct.