Whether you’re building up a retirement nest egg, saving for your child’s education or exploring a new investment strategy, selecting an advisor to assist you with your financial goals can be intimidating. In a market saturated with choices, it’s important to take a thoughtful, informed approach when you pick the investment advisory firm to help you secure your future. Here are a few considerations to keep in mind when choosing a partner to manage your wealth.

Trustworthiness

Look for a firm that has a fiduciary responsibility to their clients, which means that they are legally required to act in your best interest and put your financial gains before their own. A firm or advisor that is a Registered Investment Advisor (RIA), as defined by the Investment Adviser Act of 1940, is held to this standard and is confirmed by either the Securities and Exchange Commission (SEC) or state securities authorities. This responsibility also ensures that there are no conflicts of interest when it comes to investing your money. When advisors are required to put your gains before their own, you can feel secure in the quality of advice they provide. 

Open Communication

Make sure the firm you select emphasizes regular, open communication with their clients. Financial advisors should proactively share accurate, timely information about investments, and shouldn’t withhold any insights that might impact client decision-making. Investment portfolio advisors should be willing to speak with clients in person to answer questions, address concerns and provide expert insight. You should also have access to an easily accessible online system that delivers information about your investments and receive routine electronic communication with updates about your wealth.  

Fees and Commissions

We encourage you to look for a fee-only financial partner. These advisors usually charge a flat fee or a percentage of the investments they manage on your behalf, with the percentage decreasing slightly as assets exceed a fixed point. Fee-only advisors do not receive commissions, eliminating potential conflict of interest in the investments he/she recommends. In contrast, commission-based advisors collect a fee for their services in addition to accepting payment earned from the sale of financial products. If this information isn’t listed on the company’s website, ask about their compensation in your initial meeting. Transparency is essential, especially when it comes to how advisors are paid. Additionally, the industry standard is to bill on a quarterly basis, and clients typically receive an invoice after their initial meeting. However, we encourage you to check for firms that bill less frequently and only after they have provided you services for several months — allowing more of your money to work for you and gain returns. Your advisor should be open and honest about payment, and what it means for your investments.

Investment Philosophy

An investment philosophy is a firm set of beliefs and principles that drive an advisor’s recommendations and approach to handling your wealth in the long-term. These evidence-based values guide their market strategies and determine how they pick investment funds. Make sure that you understand your advisor’s philosophy — it should be brief and to the point — and that it aligns with your financial goals and values.

Services

Does the firm you’re considering simply provide advice about your investments, or do they offer more comprehensive financial services like college, retirement or charitable foundation planning? Evaluate your current needs and future goals, and then match them to an advisor with a wealth of experience in those areas of expertise.

Bio: Jerry has been helping clients build wealth since 1981, when he and his wife founded J. L. Bainbridge & Company, Inc. J.L. Bainbridge is a Registered Investment Advisor (RIA) specializing in the portfolio management of investments, trusts and retirement accounts, including IRAs, SEP-IRAs, SIMPLE-IRAs 401Ks and PRCRAs, as well as pension, profit-sharing and charitable foundation accounts.