Year-end Planning

Make sure the advisor you select is the right fit

Financial advisors: Choosing the right one

Many people ask themselves: Do I really need a financial advisor to help with my financial matters?

While some folks feel they can go it alone with managing their own money, I would ask this question: Would you hire someone to repair your car? Or do electrical or plumbing repair work in your home? Doing it yourself is a great idea for some, but it could be a major problem for countless others.

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Let's face it: As our lives get busier and we have less time for everything — and as we hopefully become more wealthy — our financial needs and options get more complicated. It may be time for some financial assistance.

So what steps should you take to find the right financial advisor who will address your needs? We reached out to financial advisors Lazetta Rainey Braxton and Shannon Eusey for their input.

"I get asked almost daily about what you should look for when hiring a financial advisor," said Eusey, founder of Beacon Pointe Advisors. "So we've come up with an acronym, which we call OPEN, which means looking for objective advice, prudent investment process, experience and need."

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Eusey stresses finding an advisor who's not just selling a product. That means they're not getting commission on products they're selling, so it's an open platform with objective investments.

She also stresses the need to see how these advisors are selecting the investments that they're putting into a portfolio.

"You need to see what the team looks like that will be helping with portfolio allocation," she said. Some questions she suggests you ask are:

  • Do you have a financial planner on staff?
  • Do you have an estate attorney?
  • Do you have investment folks who can actually structure the portfolio to best meet long-term objectives?

And, lastly, Eusey says to look at your own needs.

What are your personal needs when selecting an advisor?" she asked. "Do you need someone to help with your estate plan? Do you need someone to help you construct a financial plan? Are investments the most important thing that you need in your portfolio? What are your complete needs, and make sure the advisor meets those needs for you."

Braxton, founder and CEO of Financial Fountains, said she urges people to conduct at least two or three interviews with different advisors.

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"This is important because you want to make sure you have the right fit," she said. "Not all advisors are equal.

"Not all advisors cater to clients the same way," she added. "Come prepared with your questions. Be sure to share your values and your concerns, and listen carefully to their response, because it will probably be a long-term relationship and you want it to start out well."

The one non-negotiable I would ask when hiring an advisor is, 'Are you a fiduciary?' and if the answer is yes, ask them to put it in writing.
Shannon Eusey
founder of Beacon Pointe Advisors

Braxton also said people need to consider where the advisor's passions lie. She said to ask them who they enjoy serving and what the profile of their clients is.

"Do your homework and research their websites and find out what matters to them, and see if that aligns with what matters to you," Braxton said.

Do you know what you're paying your financial advisor?

"Everybody says they're an advisor, but no one really knows what that means," warned Eusey. "The one non-negotiable I would ask when hiring an advisor is, 'Are you a fiduciary?' and if the answer is yes, ask them to put it in writing."

She added, "If the person you're interviewing is not willing to put that they're a fiduciary in writing, I would look for another advisor."