Getting the services of a financial advisor is important if you want to properly manage your finances; however, keep in mind that you should not just hire any financial advisor that you come across with. You need to make sure that you would be choosing one who is reputable, knowledgeable and experienced in dealing with all kinds of financial situations. Here are some tips on how you can check the background of a financial advisor to help you determine whether or not he or she is someone who can help you out with your financial needs.
1. First, you need to verify his or her professional credentials. Ask the financial advisor about the certifications and other qualifications that he or she has and verify these by contacting the respective departments. A financial advisor can be a CFP or a Certified Financial Planner, a CPA-PFS or a Certified Public Accountant and Personal Financial Specialist or a ChFC or a Chartered Financial Consultant.
2. It is also important to check for any past disciplinary actions. You can do this by requesting the advisor to provide you with a list of the organizations that he or she is regulated by. Check with each of these groups and organizations to know if there are any disciplinary actions that are on file for the advisor. Some of the organizations that typically maintain disciplinary records include the CFP Board, FINRA, and your state insurance and securities offices.
3. You should also request for the form ADV of the financial advisor. All financial and investment advisors who have been registered should be able to provide you with a copy of this form, which lists their credentials, their educational background and their business and disciplinary in the past ten years. It can also include information about the fees, the services and the investment strategies of the advisor.
4. Lastly, ask the advisor for at least three references. Contact each of the references and ask about their personal experience with the advisor so you can get a better idea of how the advisor is with his or her clients.
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