Finding a good financial adviser

Choosing the right person to handle your finances should be taken seriously, says Jill Schlesinger.

When it comes to getting advice on managing your money, who can you trust and how do you know? We’ve received a lot of letters in recent weeks from listeners who wanted to know the right methodology for choosing a good independent personal financial adviser. That’s the question Tess and Marketplace Money Senior Producer Paddy Hirsch discussed with Jill Schlesinger, editor-at-large for CBS MoneyWatch.com.

There’s a lot of ground to cover when you interview potential advisers, but Schlesinger says the most important question you can ask is if the candidate is registered as an investment adviser with the Security and Exchange Commission.

“This is magic,” says Schlesinger, “because you’ve got to register with the SEC, and the SEC say, ‘OK, now you have a fiduciary duty unto your client. That means you have to put the needs of your client before your own needs or your company’s needs.”

Schlesinger also warns against hiring an adviser who conducts every aspect of investing (advising, trading, and holding accounts) in house, with no exterior checks and balances.

In a recent MoneyWatch.com post, Schlesinger offers 10 questions to ask when interviewing a prospective financial adviser:

  1. Are you registered as an investment adviser?
  2. How will I pay for your services?
  3. What experience do you have?
  4. What services do you offer?
  5. What is your approach to financial planning and investing?
  6. Can you provide three references?
  7. Do you have a financial interest in the entity that houses my account?
  8. How often will we interact?
  9. Is there anything in your regulatory record that I should know about?
  10. Do I like this person?

For more tips, listen to the full audio above, and let us know what you think.

About the author

Tess Vigeland is the host of Marketplace Money, where she takes a deep dive into why we do what we do with our money.

Comments

I agree to American Public Media's Terms and Conditions.
With Generous Support From...