Picking the right financial advisor might appear to be a daunting process. You’ll see multiple titles and claims being thrown around by prospective advisors, and it can be tough to separate their marketing from your actual needs.
Thankfully, you can sift through the weeds and better determine if an advisor is right for you with some simple questions and analysis. On a surface level, some of Wall Street might be intentionally confusing, but finding a trusted advisor doesn’t have to be.
Here are some useful focal points on how to choose a financial advisor:
Are they a fiduciary?
Unlike a doctor or lawyer, not every advisor is legally required to act in your best interests at all times. While many advisors will make claims about how they’ll benefit you, detrimental add-ons, like hidden fees and commissions, are perfectly permissible.
While the suitability standard legally permits this, the fiduciary standard does not. As a higher, optional standard that requires additional stringency, it legally requires their advice to be in your best interests – much like a doctor. When determining how to choose a financial advisor, this should be a first and foremost requirement.
Will they clearly explain how your wealth will be invested?
Despite all the financial jargon you’ll hear on the news and in the media, understanding your investments should be clear and transparent.
If your advisor cannot clearly explain how your money will be invested and what the plan is, you can and should either ask for a clear understanding, or find an advisor who will provide it. A great way to start is through an investment policy statement, which clearly outlines your goals, needs and wants, your investment strategy, and your asset allocation. If your advisor hasn’t already provided you with one, ask them to create one.
Learn more about choosing a financial advisor
At LexION Capital, we’re fiduciary advisors who are legally required to act in your best interests. We’re transparent and work individually with each client so they can understand and meet their financial needs and goals.
If you’d like to determine if we’re right for you when you choose a financial advisor, feel free to contact us today to have a conversation.
