Being on the financial front lines myself, I’ve certainly heard my share of horror stories on the ways that people go about hiring professionals to help manage their money. When seeking such an alliance, there’s certainly nothing wrong with asking a friend, family member or colleague for his or her recommendations. But if you consider this first step to also be your final step in making a selection that’s right for you, you’re starting off on the wrong foot.
That said, I can understand how difficult it might be for most people to know what to ask when comparing Broker A to Advisor B to Wealth Manager C. It would be like me trying to choose among event caterers were the need to arise. This is something my wife would no doubt be able to manage quite ably in her sleep, but I wouldn’t have a clue how to differentiate one from the next. Well, that’s not entirely true; I would want to know what it’s going to cost!
But I digress. The good news for investors is that the Securities Exchange Commission’s Office of Investor Education and Advocacy recently made the selection process a little easier by publishing a helpful, plain English guide:
The bulletin includes five easy tips plus a one-page checklist of questions you can use to help you level the playing field when comparing financial professionals.
If you’d like to ask the SEC’s questions of me, I would welcome the opportunity to respond. Now if they’d only put out something like that for evaluating event caterers.