By: DFreecloseAuthor: DFree Name: Debbie Freeman
Email: debbie@paladinregistry.com
Site: http://www.paladinregistry.com
About: See Authors Posts (14) | June 21, 2010 | Financial Advisors, Financial Planners

If you’re considering hiring a financial advisor or financial planner, here are five things you should avoid during your selection process.

1. Never limit your hiring criteria solely on where the advisor is located in relation to where you live. You should always look for the most competent financial professional vs. the most convenient.

2. Don’t hire someone because they were referred to you by a friend or family member. Remember that it’s your money so you don’t know how your friend or family member determined that this professional was right for them. Conduct your own due diligence and make your own interview questions rather than counting on someone else’s hiring process. Word of mouth referrals can be very dangerous…think of Bernie Madoff’s victims.

3. Don’t limit your interview process to only one advisor. Yes, it will take some time, but remember that this is your financial future we’re talking about here. You should interview at least three financial professionals. Having a choice is very important so you can compare apples to apples. Use the same interview questions for each advisor.

4. Don’t hire an advisor solely based on his/her pitch to you. Be sure you obtain written documentation from each advisor regarding his/her backgrounds, experience, credentials, business practices, compensation, conflicts of interest, etc. Having this in writing is key. Also consider doing a background check on the person to ensure there are no hidden skeletons in the closet (prior convictions, bankruptcy, liens, compliance issues). Know who you are hiring!

5. Don’t hire a financial advisor or financial planner because they are nice and personable. There’s nothing wrong with liking your advisor, however, you should never hire just because you like them. Being nice doesn’t always equate to competence. Many highly competent financial professionals are very quantitative and detail oriented. I’d much rather have this skill set managing my financial future, personally!