Choosing An Advisor

Q: I would like to find information on how to select a financial advisor that is right for my needs. Can you help?
–M. McCalla, Via the Internet

A: BLACK ENTERPRISE addressed this issue last November in an article titled “Can You Trust Your Financial Advisor?” (November 2002). The story detailed a number of things to consider when trying to locate someone to manage your money. Perhaps the most important point to remember is that you must choose someone who you know has your best interest at heart—and the best way to do that is to interview several advisors who were referred to you by satisfied friends or business associates.

To find out more about the different types of professionals who can manage your money, check out the Certified Financial Planner Board of Standards Inc. (www.cfp-board.org); the Association for Investment Management and Research (www .aimr.com), which certifies chartered financial analysts; and the U.S. Securities and Exchange Commission (www.sec.gov/investor/brokers .htm). There is no comprehensive listing of black financial advisors. The newly formed Association of African American Financial Advisors (www.quad-a-association.com/home.htm), however, may be helpful.

Other things to keep in mind as you go through the process of choosing an advisor:

  • Do a background check on the advisor before you commit. Ask how long he or she has been in the business and get a sense of his or her track record.
  • Ask how the advisor gets paid. Make sure the advisor’s compensation isn’t driven by sales commissions on trades or insurance products because he or she may try to sell you products you don’t need. Remember, you have to be comfortable with the arrangement because it’s your money.
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