Tags: financial | adviser | return | help

NYT: How to Judge Your Financial Adviser

By    |   Monday, 12 January 2015 02:50 PM

As you look back on your investment performance for 2014, you might want to assess how good a job your financial adviser is doing for you.

It's not just a matter of returns, experts say. "Returns are a piece of the puzzle," Tom Robinson, managing director for the Americas at the CFA Institute, told The New York Times. "But I'd probably look at those last."

Communication typically ranks higher than does returns when rating your adviser.

Times writer Paul Sullivan lists several other areas to focus on too":
  • Expertise and Personality. "A tough question to ask your adviser is what he or she really knows. You may be with someone whose advisory practice does not match your needs," he writes.
  • Conversations. Is your adviser available when you need him/her? Is your adviser honest in assessing your financial performance and situation?
  • Responsibility. Eleanor Blayney, consumer advocate at the Certified Financial Planner Board of Standards, told The Times you should ask yourself: "What decisions has your adviser helped you make this year? What decisions have we made together? What can he help me with? If it's just going to be decisions about buying and selling, you may want more."
Meanwhile, Bankrate.com lists five qualities of sub-standard financial advisers:
  • "Losses that exceed standard benchmarks." That would be market indexes likes the S&P 500.
  • "Selling products instead of sound advice." A lot of advisers get paid a commission based on the type of investments they sell.
  • "Maximizing risk regardless of goals." Some investors prefer low-risk strategies.
  • "Linking past performance to future results." Just because an investment has performed well in the past doesn't mean it will in the future.
  • "Failure to maintain basic investment safety standards."

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As you look back on your investment performance for 2014, you might want to assess how good a job your financial adviser is doing for you.
financial, adviser, return, help
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2015-50-12
Monday, 12 January 2015 02:50 PM
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