Choosing the right financial adviser: Division of Securities offers tips to stay safe, attain goals
In recognition of Financial Planning Month this October, the Ohio Department of Commerce Division of Securities is highlighting ways that Ohioans can help ensure they select a financial adviser tailored to their unique financial needs.
Working with a financial adviser can help ensure you manage personal finances effectively and you are able to make progress toward achieving financial goals. Whether you're interested in starting a college fund, getting out of debt, preparing for retirement or simply getting your financial house in order, the right adviser can help you establish specific goals, identify a strategy to attain them, and make sure you remain on track. Developing a relationship with an adviser can significantly influence your future financial well-being.
“The process of finding the right financial adviser doesn't need to be stressful,” said Ohio Securities Commissioner Andrea Seidt. “With a little research and understanding, you can make sure you choose an adviser who best meets your specific needs. Your finances play a critical role in your future, and selecting the right adviser is an important early step in securing that future in the short and long term.”
To help Ohioans navigate the process of selecting the right financial adviser, the Division of Securities is offering clear guidance to make sure the adviser’s financial expertise matches with your financial needs and goals.
Understanding Your Financial Needs
Before you can start your search for a financial adviser, it's important to identify what it is you're hoping to achieve. Financial advisers offer a range of services, from savings goals and budgeting to retirement planning and asset management. Understanding your specific needs will help to streamline the search process and ensure you select an adviser whose expertise aligns with your objectives.
Researching Adviser Credentials
The financial advisory landscape encompasses various professionals, including Certified Financial Planners (CFPs) and Registered Investment Advisers (RIAs), each with distinct credentials and areas of expertise. Ensuring that advisers adhere to a fiduciary duty, in which they are obligated to act in your best interests, can offer peace of mind since you’ll be entrusting them with your financial goals.
Exploring Different Adviser Types
From digital options like robo-advisers to in-person planners, there are a wide range of adviser types that exist to cater to diverse preferences and budgets. In addition, resources such as FINRA’s "Working With An Investment Professional" can help Ohioans understand the range of available professionals and services.
Vetting an Adviser
Once you've identified potential advisers, conducting a thorough background check is imperative. Ohio residents can research the background and experience of financial brokers, advisers and firms by utilizing FINRA’s Broker Check. That tool can also help verify that an individual or firm is registered, as required by law, to sell securities and/or offer financial advice.
In addition, make sure to verify an adviser’s credentials, review service offerings and understand their fee structures, such as whether it is percentage-based, commission-based or involves flat fees. By doing this work up front, you can help ensure alignment between your financial ambitions and the adviser's capabilities.
Asking for Referrals
If you have friends or loved ones who use financial advisers, you may consider asking them about their experience. If they are happy with their adviser and have a longstanding relationship, you may consider reaching out to the adviser to see if they’d be willing to engage in an introductory conversation.
Making the Selection
You’ll be engaging with your financial adviser on a regular basis, and you will often be discussing sensitive topics. It’s important that, in addition to having the appropriate credentials and background, that you feel comfortable with your adviser. If you don’t feel 100-percent comfortable with an adviser you’re considering, you may consider continuing your search.
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