How To Select An Investment Advisor


Financial Advisors And Their Certifications

How To Become A Financial Adviser

As you begin to weigh your options, you might notice that some advisors hold various certifications. Certifications are indicative of advisors level of experience and education, as well as their areas of expertise.

However, not all certifications are alike. Some, like the certified financial planner and chartered financial consultant designations, require extensive coursework, a background check and a certain level of experience and education. On the flip side, others can be easily obtained simply by paying a fee.

The best-known financial advisor certifications are CFP, ChFC, chartered financial analyst and certified public accountant . The CFP, CFA and ChFC designations both require multiple courses and comprehensive exams. Furthermore, candidates must have degrees and years of experience to even be eligible to earn them. CPAs must also complete education courses and exams, but they specialize in accounting. All three certifications include a code of ethics that advisors must abide by.

There are many more certifications than the three above, but when youre looking around, be sure to check the processes advisors must go through to obtain those licenses. You can use the NAPFA website or the CFP website to verify an advisors certifications.

Learn Which Financial Advisors Have Your Back

Financial advisors go by many names: investment advisors, brokers, certified financial planners, financial coaches, portfolio managers. There are even financial therapists. So who does what and who can you trust?

Since some of the most common titles advisors use, including the term “financial advisor” itself, aren’t tied to any specific credentials, dont assume that someone who uses an official-sounding title has any specific training or credentials. Anyone who gives investment advice must be registered as an investment advisor with either the U.S. Securities and Exchange Commission or the state, depending on their assets under management.

Some financial advisors have a fiduciary duty to their clients, meaning they are obligated to act in their clients best interest rather than their own. Always work with a licensed, registered fiduciary preferably one who is fee-only, which means the advisor is paid directly by you and not through commissions for selling certain investment or insurance products. Certified financial planners have a fiduciary duty to their clients as part of their certification.

No matter what title, designation, certification or license an advisor claims to have, its on you to vet the advisors credentials and experience. Always research an advisors background by looking up the firm’s Form ADV before you agree to work with them. You can also review an advisor’s employment record on FINRA’s BrokerCheck website.

Determine If You Need A Financial Advisor

Financial professionals can be a big help when youre trying to map out your future, but you dont need to hire one to be successful with your savings and investment goals.

If your employer provides a 401, for example, many times the plan will offer the option to invest in target date funds. These types of investments will keep your retirement savings on track without too much required oversight from you or a financial professional.

You still may need additional investments, such as an individual retirement account and a taxable brokerage account. If youre the kind of person who likes to be super hands on, you can sign up for one of the brokerage firms such as Charles Schwab and TD Ameritrade.

Yet creating and maintaining a balanced, diversified portfolio can take a lot of time and research. If that feels overwhelming, you can always work with the so-called robo-advisors, which typically manage your money for you. These platforms which include Betterment, Schwab Intelligent Portfolios, Vanguard Personal Advisor Services, Ellevest and Wealthfront are generally less expensive than working with a human financial advisor, but they may not provide the same level of customized advice and solutions.

Maybe you dont want to map your financial future on your own, or you have a more complex financial situation, such as stock options or perhaps you help out with family financial obligations. That may require a face-to-face conversation with a human financial advisor or planner.

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Choosing An Investment Advisor

An investment advisor helps you make important decisions about your financial goals. So its important to take the time to do some research and ask questions to find an advisor who fits your needs.

  • What if I decide to go without an Investment Advisor?

  • How do I know an advisor is registered with IIROC?

    All Canadian investment firms and individual Investment Advisors dealing in Canadas stock and bond markets must be registered with IIROC.

    IIROCs AdvisorReport can help you find out if an advisor is registered with IIROC and check their qualifications – including any history of discipline.

    You can also check if a firm is IIROC-regulated.

  • What questions should I ask an advisor?

    Once youve found a potential advisor, ask questions and find out if the advisor is right for you. For example, ask about their background, what products they offer, and how they are paid.

    Advisors will also ask you questions, about your financial situation and goals, your tolerance for risk, and your financial knowledge. It can seem like a lot, but if they arent asking they arent doing their job: IIROCs rules require advisors to understand their clients, so their recommendations fit your unique circumstances.

    Your firm also needs to keep you updated with regular account statements and reports on the performance of your investments and the fees you pay.

  • Watch Out For These Common Investment Frauds

    Dan Vobroucek

    Affinity fraud

    This scam exploits the trust between tight-knit communities and specific groups of people . A scammer will approach and convince a trusted member to invest, who then unwittingly encourages more people from their community.

    The investment generally turns out to be a Ponzi scheme. By the time people are wise to the scam, the money is long gone. Always be skeptical of an investment opportunity and analyze it thoroughly, no matter who presents it.


    Your broker makes an excessive amount of selling and trading with the goal to increase their commission earnings, disregarding your best interests. Watch out for unauthorized or frequent trading, and any suspiciously high amount of fees in your portfolio, as it could be a sign that your broker is defrauding you. Be especially wary of advice to buy variable annuities, as they have very high fees, and are commonly pushed by brokers who want to earn higher commissions.

    Promissory notes fraud

    Promissory notes are a legitimate form of investment. Investors lend money to a company, which in turn promises a fixed return. However, promissory notes are commonly used to scam individual investors so before investing in these types of securities, you must check out their legitimacy.

    A promissory note must be registered, either with the SEC or with the state securities regulator. You can verify a promissory note online with the SECs EDGAR database or by calling the state securities regulator.

    Pump and Dump

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    Ask About Personal Credentials

    Pay close attention to the letter designations after a potential advisors name. It shows a level of experience and commitment to their disciplineand can reveal blind spots and potential weaknesses.

    CLU and ChFC are insurance industry credentials. CPA designates a specialist in accounting and tax. CFA designates a specialist in investment management. On the other hand, the designation CFP Practitioner singles out advisors who concentrate on comprehensive planning. Each member of Windsor Wealth Managements Investment Policy Committee is professionally credentialed.

    Eight Steps To Choosing A Financial Adviser

    Well send you a myFT Daily Digest email rounding up the latestNext Act news every morning.

    People have long memories when it comes to sharp financial practice. Over the past 30 years, a string of mis-selling scandals involving pensions, investments and commission-driven products such as payment protection insurance have left many sceptical about the wisdom of approaching someone for financial advice.

    The way such advice is given has nonetheless changed dramatically in recent years, largely under the influence of regulators. Where once people may have been invited to free sessions, paid for by kickbacks or commissions on investments and products, todays customers must pay an upfront fee often running into several thousand pounds for unbiased advice tailored to suit their needs.

    These tougher standards were introduced in 2013 under the Retail Distribution Review , which forced regulated advisers to hold higher levels of qualifications and banned commission-driven sales. Nevertheless, quality varies and charging structures can still be opaque.

    At the same time, individuals have much greater control of their financial affairs. Pension freedoms, the rise of cheap tracker funds and technology platforms make it much easier for those with a degree of savvy to run their own money, and cut out the middleman.

    But not everyone feels capable of dealing with their own personal finances without a degree of help. So what is the best way to get that financial advice?

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    Rias Register With The Sec And State Agencies

    All RIAs must register with either their state agency or the SEC. Whether they register with one or the other depends largely on size: If an RIA has $100 million or more in regulatory assets under management, they generally must register with the SEC. If they have less, they typically register with their state securities commission.

    There are some exceptions. If an RIA must register in 15 or more states, it can choose to register with the SEC instead. An RIA can also register with the SEC if their state doesnt have a statute regulating advisors.

    Series 65 Registered Investment Advisors

    When Do I Need A Financial Advisor?

    The Series 65 is the license for Registered Investment Advisors and allows an advisor to sell advice but does not allow them to sell financial products on commission. Although it is for RIAs, the license may also be held by stock brokers who run managed accounts and charge on an AUM basis. Those holding only the series 65 license can advise on anything within financial services, including products sold on commission like insurance, but they cannot sell the product and nor collect the commission.

    The Series 65 license more closely resembles other professions such as doctors, accountants, and lawyers who don’t make their money through commissioned product-sales. Instead, these professionals and RIAs are paid for their services directly by the clients.

    You may also see those with a Series 65 license referred to as Investment Advisor Representatives . Technically, the advisory firm is the RIA and the advisor employees are IARs–but Registered Investment Advisor is often used to describe both the firm and the people.

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    When Should You Talk To A Financial Advisor

    You can seek out financial help at any time, but its especially important to get financial guidance ahead of significant life changes. Whether youre buying a house, starting a job, getting married or having a child, these life events can have major financial implications, and some upfront financial planning can go a long way toward building a stable financial future.

    Its also wise to speak with a professional if your financial situation itself has changed. Maybe your salary has increased or you inherited some money from a relative. When money starts flowing in, its a good idea to give it a positive direction otherwise, it can be all too easy to spend unnecessarily.

    Consider Southern Investment Services

    While there are no concrete guidelines for selecting an investment adviser, it is important to have confidence in and feel comfortable with your representative. Once you have made the decision to enlist the help of an investment consultant, consider speaking with one of the Infinex Investments, Inc Financial Consultants we have made available to you. He or she would be happy to meet with you on a no-cost, no-obligation basis to discuss your financial goals, build a personal investment profile, and help you devise a strategy to reach those goals.

    Infinex Investments, Inc. Financial Consultants have access to up-to-the-minute market information and the research tools necessary to serve your investment needs. Also, when you choose a Infinex Investments, Inc. Financial Consultant, you get a whole team of professionals working with you behind the scenes a team that offers you an unmatched combination of knowledge, service, and professionalism.

    Securities, investment advisory services, and insurance products offered through Infinex Investments, Inc., member FINRA, SIPC, and a SEC registered investment advisor Infinex and Southern Investment Services are independent entities.

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    Decide What Part Of Your Financial Life You Need Help With

    Before you speak to a financial advisor, decide which aspects of your financial life you need help with. When you first sit down with an advisor, youâll want to be ready to explain your particular money management needs.

    Keep in mind that financial advisors provide more than just investment advice. The best financial planner is the one who can help you chart a course for all your financial needs. This can cover investment advice for retirement plans, debt repayment, insurance product suggestions to protect yourself and your family, and estate planning.

    Depending on where you are in life, you may not need comprehensive financial planning. People whose financial lives are relatively straightforward, like young people without families of their own or significant debt, might only need help with retirement planning.

    People with complex financial needs, however, may need extra assistance. They could be looking to establish college funds or trusts for their children, navigate aggressive debt payment situations or solve tricky tax problems. Not all types of financial advisors offer the same menu of services, so decide which services you need and let this guide your search.

    What Comprehensive Means


    Truly comprehensive financial planning will go beyond investment management and life insurance to include every aspect of your financial life. Comprehensive financial planning integrates investment planning with estate planning, tax planning, risk management, education funding, cash management, employee benefits selection, debt management, goal planning, and every other aspect of your financial life.

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    What Is A Robo

    A robo-advisorâalso known as a robo, a roboadvisor or a robo-adviserâis a type of brokerage account that automates the process of investing. Most robos charge lower fees than conventional financial advisors because they invest your money in prebaked portfolios made primarily of specially chosen, low-fee exchange-traded funds . Some robo-advisors also offer access to other more customized investment options for advanced investors or those with larger account balances.

    You can opt for either taxable brokerage accounts or tax-advantaged individual retirement accounts with a robo-advisor. Most robos offer multiple types of IRAs, including traditional IRAs, Roth IRAs and SEP IRAsâand theyâll help you choose the right account type based on your needs.

    Many robo-advisors can help you save for different personal finance goals simultaneously by providing sub portfolios with different asset allocationsâthink a growth-oriented allocation for your home down payment goal, and a more income-oriented allocation for your retirement goals. Increasingly, robo-advisors are also offering basic banking services, like cash management accounts and savings accounts.

    Commissioned Product Sales Licenses

    All other licenses in financial services are sales licenses which allow advisers to sell financial products on commission. The word advisers is in quotes because they are legally not advisors and do not offer advice. Instead they are sales representatives simply making a sales pitch. Many financial advisers hold the Series 6, 7, 3, and 63 licenses. Financial advice given by those with these licenses is designed primarily to make the sale of the product happen.

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    Are They A Fiduciary

    Not all financial advisors are fiduciaries. A fiduciary financial advisor is required to keep your best interest in mind when making recommendations. If a financial advisor is not a fiduciary, they can make recommendations that may profit them. For example, they may recommend certain investment or insurance products that give them a higher commission, even if a similar product might offer you similar performance at a lower cost to you. A fiduciary advisor, in contrast, could not do this.

    Determine Whether You Need A Fiduciary Financial Advisor

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    You might think all financial advisors would put their clients needs first and avoid conflicts of interest but thats not always the case.

    Many different financial professionals fall under the term financial advisor, but only some of them must adhere to the fiduciary standard.

    The fiduciary standard of care also known as fiduciary duty is a rule that requires financial advisors put their clients best interests ahead of their own, even if that means recommending strategies that could reduce their own compensation.

    Registered investment advisors have this obligation while critics say brokers do not, despite a recent regulation that was intended to strengthen these standards.

    This comes as a surprise to a lot of people: a 2019 survey from the digital wealth manager Personal Capital found that 48% of Americans mistakenly believe that all financial advisors must meet this fiduciary standard.

    Meeting the fiduciary standard matters most when youre hiring a financial advisor to invest and choose financial products on your behalf. If youre simply seeking help building a monthly budget, this issue is likely not as crucial.

    In either case, dont be shy about asking potential financial advisors whether they are fiduciaries and any other questions about how theyre compensated. Its your net worth at stake, after all.

    Since this is a complex topic that deserves more attention, we dug a little deeper. Read our in-depth research further down below.

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    Questions To Ask A Financial Advisor

    In your first meeting with a financial advisor, make sure you learn the answers to these questions and that youâre comfortable with their responses.

    • Are you a fiduciary?
    • Are you always acting as a fiduciary?
    • How do you make your money?
    • What is your approach to financial planning?
    • What financial planning services do you offer?
    • What kind of clients do you normally work with?
    • Do you have any account minimums?
    • Do you have any conflicts of interest in managing my money?
    • What information do I need to bring for you to look at when developing my financial plan?
    • How many times and how often will we meet?
    • Will you collaborate with my other advisors, like CPAs or attorneys?

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