Getting Started in Finding a Financial Advisor

Getting Started in Finding a Financial Advisor explores the important relationship between an investor and their financial advisor and examines how you should go about finding potential candidates. Along the way, it shows you how to interview and check the credentials of six key types of advisor so that you can spot and avoid rogues, scam artists, and incompetents. You will also learn how to understand what can happen if the institution or the advisor ends up in financial or legal difficulty.

Introduction:

There has never been a time when people needed more help with their finances, nor a time when they were more scared about hiring an advisor. As the stock market was reaching the depths of its biggest downturn in our lifetimes, Bernie Madoff ’s $50 billion deception of rich, brilliant investors was coming to light. And while the world’s largest investment fraud scheme captured the big headlines and the big investors, there were dozens of smaller schemes perpetrated on average folks by rogue brokers and financial planners.

Chances are good that you never heard about Earl Blondeau, the Raleigh, North Carolina, investment advisor who used his job to gain access to funds being held in trust for the benefit of a client, or of Dallas advisor Cliff Robertson, who not only duped investors of their life savings and tapped their bank accounts, but stole his clients’ identities too. While the Madoff case caught the headlines, the smaller cases—and I picked those two at random from a file filled with hundreds of advisor arrests and guilty pleas from the last two years—were far more common and devastating.

Beyond the victims who were directly affected by these frauds, the damage included the public perception that hiring an advisor could, indeed, be asking for trouble more than finding a solution. While that kind of knee-jerk over-reaction is not rational, it’s hard to overcome, especially during financial times when the market makes many of the best advisors look like they are unable to help.

Moreover, fear actually makes many consumers more susceptible to the bad guys. Not knowing whom to trust, they wind up at a cocktail party or on the sidelines of the soccer field chatting with someone who happens to be an advisor and thinking, “Providence has brought me someone I can trust, at just the right time in my life.” Invariably, every bad guy was similarly trusted by people who let those personal connections override the standard due diligence necessary to separate the quality advisors from the boobs, idiots, frauds, and charlatans.

This book will walk you through that process, and no advisor deserves to be working for you if he or she can’t pass muster. It’s a self-help book for finding people who can help you. It’s important to recognize two key facts when it comes to hiring financial advisors:

1. The vast majority of them are honest, scrupulous, trustworthy, hard-working folks with good intentions.
2. You can do almost all of these jobs yourself.

It’s equally important to recognize the corollaries to those facts:

1. It doesn’t help you that there are so many good advisors if you pick an incompetent, lazy, or crooked one.
2. You can butcher your finances as well or better than anyone else if you don’t know what you’re doing.

Think of financial advisors the same way you think of carpenters, plumbers, electricians, and auto mechanics. In each of those cases, you can do the job yourself—there are books and how-to articles, dedicated specialty magazines, and television shows dedicated to showing you the way—but you’re better off hiring a pro if you lack the time, ability, know-how, and willingness to finish the task properly and without incident.

Having picked up this book, you are on the verge of making one of the biggest financial decisions of your life, one that will have more impact on your financial well-being than simply picking a good stock or mutual fund. That’s precisely why it’s important to go through this process the right way.

You don’t need to read every page to find great advisors. Decide what you need from this book and use it to your advantage, whether you get the soup-to-nuts education on selecting advisors of every stripe, or use it as a guide for grilling the candidates, questioning their references, and doing background checks. Either way, it should help quell your fears on both sides of the current fright-mare affecting consumers. It will help you decide if you need an advisor to get through these tough times and will then enable you to hire one who won’t be in tomorrow’s headlines.

Contents:

• You Need Financial Help.Now What?
• You Get What You Pay for, and Pay for What You Get
• The Seven Big Mistakes People Make When Hiring Advisors
• Why You May Be the Only One You Can Trust
• Swimming through Alphabet Soup
• Your First Meeting with an Advisor
• Interviewing a Financial Planner
• Interviewing a Broker
• Interviewing a Money Manager
• Interviewing an Insurance Agent
• Interviewing an Accountant/Tax Preparer
• Interviewing a Lawyer
• Interviewing a Real Estate Agent
• Get What You Need from References and Referrals
• Breaking Up Is Hard to Do

Getting Started in Finding a Financial Advisor By Charles A. Jaffe pdf