Why (and How) to Engage a Financial Adviser

Recently, I wrote a series on financial advisers. I shared my bad experiences and covered many of the worst practices of financial advisers.

Not all financial advisers are predatory and dispense generic or lousy advice. But to get my money’s worth in terms of fees and commissions, I realized that I need to choose an adviser carefully and make sure my choice doesn’t overreach his or her boundaries in terms of professional expertise and credentials.

Problems with Financial Advisers: Selling to Generate a Commission (Only)

To test the local advisers’ skills and integrity, I worked with my initial contact to execute the rollover of a 401(k) plan to an IRA; and then make investment recommendations that I either approved or rejected. Based on recent successes, the adviser seemed confident of recommended investments and their superiority to other choices.

I didn’t mention to the sales rep that I had a significant amount of money in an IRA in a separate account, possibly available for management for the right person. Again, my goal was to evaluate the adviser’s integrity and knowledge and then possibly expand our relationship.

Initially, I was pleased with the service. The rollover was completed and funds invested. But when another adviser replaced my initial contact, a new and improved recommendation was made. I was happy to test this new person’s investment savvy. But later I felt that the change in investments may have been contrived just to generate a sale. The investment did not seem superior and the adviser did not maintain the relationship.

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