What to Look for When Hiring a Financial Advisor
With over 200,000 financial advisors across the country, how do you know which one will be the right fit for your situation and personality? (1) The financial advisor you choose to handle your wealth can have a significant impact on your confidence, investment strategy, the fees you pay, and your confidence in your financial future. This is not a decision to take lightly, especially since each advisor has a different level of service, expertise, and ability.
Often, when you find a good advisor, you can develop a strong relationship that can last a lifetime and even through multiple generations. As such, you should take your time to find an advisor that meets your family’s needs.
When you start your advisor search, look out for these eight factors.
1. Legal Violations
It’s a good idea to research an advisor’s credentials and run a background check with regulatory agencies. Some advisors may have been subjected to disciplinary action if they violated any laws or if a client took action against them. You can look up an advisor’s professional history by visiting the SEC Public Disclosure site, www.adviserinfo.sec.gov. This database will also show you the years of experience an advisor has and the licenses and credentials he or she has.
2. Fiduciary Responsibilities
An advisor who serves as a fiduciary accepts a responsibility to put her client’s interests first and foremost in all decisions. A fiduciary is supposed to avoid conflicts of interest and remain unbiased in her recommendations and advice.
For example, at The Stanton Group WP | Seacrest Wealth Management, we agree to abide by a strict code of professional conduct, and as fiduciaries, we believe in transparency and putting every client first. If an advisor says your relationship will be governed by a fiduciary agreement, ask for a copy of the agreement in writing.
3. Asset Custody
When it comes to your investments, it’s important to know not just the products an advisor chooses but also where your assets are custodied. Your assets should be custodied at a well-known, secure company with all of the protections offered to investors. Be wary of investors who manage custody of their clients’ assets, as that likely will offer you less protection.
At our firm, Charles Schwab holds our client assets, providing our clients the security and safeguards of separate account custody. Charles Schwab is the largest, by market share, of registered investment advisor custody, with over $1.06 trillion of client assets. We believe this offers our clients greater confidence in where their assets are being custodied.
Experience is essential when you’re working with a professional of any kind, especially someone handling your finances. Don’t be shy about asking an advisor about their industry experience, as well as the types of clients they typically serve. It will offer you greater confidence to know what market conditions they’ve experienced and how many years they’ve been working in the industry.
I personally have more than a decade of experience as an advisor and more than 30 years of experience in the financial services industry. Largely serving business owners, pre-retirees, retirees, and families, my mission is to provide unbiased financial counsel while delivering exceptional service.
Financial planning and investment costs can be confusing. And too often, financial advisors don’t readily disclose their fees. As a result, you may not realize how much you’re paying for the services you’re receiving.
We believe it’s important for our clients to know our costs upfront and how we get paid. We use a transparent fee structure, tied to the work we do for the client. You will know what you are paying, based on the services provided. We provide all prospective clients with an all-inclusive summary of their current investment management and planning fees and compare to the fees you would pay with our practice.
6. Planning Process
A financial strategy should always be drawn up first before an advisor recommends an investment strategy. Make sure you speak with an advisor as to how he makes recommendations and strategies for his clients.
At our firm, our focus is to learn about our clients and what is important to them by listening and asking good questions developed from years of experience. Following, we provide objective and impartial feedback to our clients about their current situation and, if appropriate, develop a more suitable plan we believe is more aligned with their needs. We believe that financial planning is a process, not an event. As the markets, economy, opportunities or one’s personal circumstances change, so do our clients’ plans.
7. Investment Strategy
You should always ask an advisor what their investment strategy is and how it is designed to help a client meet their needs. And if the investment strategy includes investing a substantial portion of assets in stocks, it’s important to know that the advisor has a plan to protect the assets in a bear market.
At our firm, every portfolio has a particular asset allocation, agreed upon by both the client and the advisor. We use a rigorous analytical process to select investments that we believe have the maximum potential to produce results consistent with the client’s investment policy.
Take your time and trust your intuition when selecting your advisor. The relationship should feel right and you should never feel pressured to make a decision quickly. An advisor should be happy to answer these questions and any others you may have about how they operate.
We believe in complete transparency and want our clients to feel comfortable working with us and asking any questions they may have. If you’d like to learn more about our answers to these questions or any others you may have, don’t hesitate to reach out to us. You can start now by calling our office at 630-445-2380 or emailing JStanton@seacrestwm.com with any of your questions and we’ll be happy to answer them.
John Stanton is the Wealth Advisor at The Stanton Group WP | Seacrest Wealth Management, LLC. With more than three decades of experience in the financial services industry, he serves as an advisor for clients, focusing on financial planning and the investment strategies to support their financial plan. Based in Naperville, Illinois, John serves clients in Naperville, Plainfield, Darien, and throughout the state. Learn more about John’s services by visiting www.stantongwp.com or connecting with him on LinkedIn. You may reach John Stanton at l 630-445-2380 or email JStanton@seacrestwm.com.
The Stanton Group WP provides investment advisory services through SeaCrest Wealth Management LLC, (the “SWM”) a registered investment advisor. SWM is a registered investment advisor (“RIA”), with the U.S. Securities and Exchange Commission located in the State of New York. SeaCrest Wealth Management, LLC can be reached at (914) 502-1900.