You may think you don’t have enough money or assets to use a financial advisor. You’re likely wrong about that. A financial advisor can help you build wealth regardless of how much wealth you’re starting out with. But you need to be very careful when selecting a financial advisor. These professionals will have insights into every aspect of your financial life. They need to be reputable, trustworthy, ethical and committed.
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On her website, financial guru Suze Orman posted a blog exploring eight red flags to watch out for when choosing a financial advisor. Don’t settle for any financial professional who exhibits or does any of the following.
Are you getting a random phone call from a so-called financial advisor and you did nothing to spur it? Hang up. “A successful advisor doesn’t have to look for clients,” Orman wrote. “Clients seek her or him out.
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Just as you should hang up if a financial advisor you’ve never heard of/contacted calls you, you should slam the door if one shows up to your home. A financial advisor worth your time and money will be too busy for such weird outings. “When I was seeing clients … I didn’t have time to breathe, let alone get in a car and drive for half an hour across town to a client’s home and then drive back again,” Orman wrote.
Presentation matters. If you pay a visit to a financial advisor and get a sense of clutter or chaos from their office, that’s a red flag that should cause you to run.
If you’re enmeshed with a spouse or life partner, your financial advisor will want to know how finances work between you. They’ll want more than just an explanation from you; they’ll also want to talk with your partner. If you consult a financial advisor who doesn’t mind if you don’t bring your partner along, move on (unless you have an incredibly valid reason to leave them behind).
Orman noted that a good financial advisor will always ask you the following questions.
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How is your health?
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Are you in debt?
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Are you responsible for aging parents?
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Do you have a will or trust?
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Will you inherit money someday?
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Do you need to make a major purchase like a new car or a new roof for your home?
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Do you have a retirement plan? Are you funding it to the maximum allowed by law?
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Do you have adequate insurance?
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Are you saving for your children’s education?
