If you want a mechanic to be able to fix what’s wrong with your car, you must let him know about any peculiar sounds you hear (even if it requires admitting you shifted into reverse from third gear). Going to see your doctor requires similar honesty about things you don’t always want to reveal, such as actual diet and exercise habits, but this is necessary to obtain the best guidance and care. Similarly, to get the best advice from your financial advisor, be sure to let him know your important upcoming plans (such as retirement, or home purchase) as well as concerns (such as health, and health care costs).
You must feel comfortable enough with the person you delegate to invest and protect your money to be forthright, and not expect him to guess, or read your mind. That’s why you should apply as much care to choosing a financial advisor as to choosing a medical professional.
The first step in choosing a financial advisor is research. According to the Financial Industry Regulatory Authority (FINRA), only 15% of people do a simple background check on a potential financial advisor. Fortunately, there is a simple way to do this. The BrokerCheck website (BrokerCheck.FINRA.org) provides information about the advisor’s employment, registrations, and licenses, as well as any investment-related investigations, disciplinary actions, arbitrations, criminal records, or bankruptcies.
Before you meet with an investment advisor, recognize that every investor has a different risk profile. Your investment advisor, in consultation with you, should choose one that fits your unique needs and circumstances.