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Retirely in The things you own end up owning you,

How to not get stuck with a bad Financial Advisor

Not everyone needs a financial advisor, but there are plenty of reasons why you’d want to hire one. Whatever your purpose for seeking help with your finances, this criteria can help you pick the best advisor for you.

Forbes contributor Joel Johnson lists some important factors for picking a good financial advisor. Here’s a big one:

“Having an established track-record as a good business person is fundamental to being an effective broker or financial advisor, in my view. How somebody can handle millions of dollars of other people’s money and have no clue as to how to run a business is beyond me. Find an advisor who is independent, respected in the industry, and understands from experience the ins and outs of running a business. That includes hiring and firing employees, supervising customer service staff, and delegating issues as they come up for effective responses, instead of doing absolutely everything themselves.”

Kis_ev left an excellent comment:

“Great advice. My wife and I came to trust our financial advisor through personality, transparency, returns, method, and time. We started with a whole life insurance policy for my wife when she was 29. Our advisor explained how it works, the projected returns, the pros and cons, and how he is compensated. He then showed us his own policies and explained his strategy. 3 years later, we are 2 years ahead of schedule and will be paid-up sooner than expected.

We then started talking about managed IRAs, the fee structure, his strategies, and his previous returns. We decided that we would hand over a portion of our account balance for him to manage. I’ve been self-directing for 12 years and have had comparable returns, but I feel more confident that our advisor will consistently outpace me over the long-haul.”