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Three Tips for Finding Good Financial Help

For some investors, a financial advisor is a non-negotiable, a sine qua non conductor through the arcana of investing. Some investors, on the other hand, would never consider paying someone for advice when there are so many places to independently research the latest portfolio pick.

Advisors can serve different functions for different investors – you may feel perfectly fluent in finance, but appreciate having someone to check in with who keeps you on track. Or maybe you just appreciate having a sounding board for money conversations, which can be tricky to have with friends and family.

Whatever your motivations, if you're looking for an advisor or taking stock of an existing relationship, here are a few things to keep in mind.

  1. It starts with you. In order to find the right financial advice, you must first identify what you're really asking for. Do your own inventory. Are you looking for an objective point of view to help you counter-balance emotional decision making? Do you need help building a long-term investment strategy? Do you want specific, situational input on how to invest an unexpected inheritance? Each one of these could warrant a different solution. If you don't know where you want to go, it will be difficult for someone else to help you get there.
  2. The advice business has changed. Once you've identified what your goals are, your next step is to determine how much advice you need and where to get it. There are so many resources available today – traditional financial advisor shops, direct brokerage firms, so-called robo-advisors, even financial apps. If you're young and just starting out, you might want to try an online resource. If your situation is more complicated, involving issues like estate planning or tax treatments, you may want to take a look at hiring an experienced advisor. Try asking three people you know and trust, and then interview each resulting prospect. Odds are that one of them will pop to the surface as a good fit.
  3. It ends with you, too. "Set it and forget it" is not an investment strategy. If you go the automated route, open that monthly summary email and become familiar with it. Figure out where the return numbers are located and what your holdings are. If you hire a professional, being proactive can help you get the most bang for your buck. Paying someone to attend to your finances doesn't mean you can tune out entirely. Ensure you never leave your advisor's office without scheduling your next financial check-up, generally about six months out. If you have questions about what you see, never hesitate to ask.

A little knowledge goes a long way, and a bit of education tends to be self-reinforcing – asking more questions leads to more answers and a better base of knowledge. Whether you have a long-standing advisor relationship, are thinking about a new one, or are choosing to strike out on your own, staying up to speed with the markets and knowledgeable on the fundamentals will stand you in good stead.