Financial Advisor Red Flags

Congratulations if you are at the step in your life where you need a financial advisor. Financial advisors can be great in helping you manage your money. They can also advise you on what to invest in and set up a plan that works with your risk tolerance. While there are so many of them out there, you have to know what financial advisor red flags to look for so you don’t end up with the wrong one.

No Accreditation or Qualifications

When picking out financial advisors, you have to look at more than just their reviews from past customers. You need to do your research. What kinds of qualifications and accreditations do they have? If they don’t have the necessary qualifications, move on. Top-tier advisors hold a Bachelors’s degree from an accredited institution and have a Certified Financial Planner (CFP) or Certified Financial Analyst (CFA) accreditation. Do your due diligence by visiting the FINRA BrokerChecker, CFP Board, and SEC Investment Advisor Public Disclosure websites. These websites will tell you if your advisor is accredited, verify credentials, and investigate their history and qualifications.

Flashy and Pushy

Some financial advisors try to sell you by being flashy. They know you want to save and invest so that you can have not only what you need but all the things you want later in life. They may sell you a dream by showing up in designer suits, wearing flashy jewelry, and even driving fancy cars. While it looks good on paper, they should have more to offer than good looks and expensive taste. You need to see verifiable results, not to be sold hopes and dreams. Sometimes being flashy is just a distraction to get your money. Don’t fall victim to it.

No History of Results

Again, you need to see verifiable results from your financial advisor. Their word is not enough, and neither are those testimonials on the person or companies website. Do some research. What are real customers saying about them online, on blogs, and even on reviews sites? Don’t be afraid to ask them for concrete information about how their portfolios performed over 1, 3, 5, or 10 years. Ask them what can they do for you. If they are boosting short-term results and making promises of high-valued returns, do not fall for it.

Unanswered Communication

Lastly, time is money and not just for the financial advisor. Your time is precious, and when it’s time to talk business, you need someone who is going to be responsive to your communications. If your advisor never picks up the phone, doesn’t respond to questions, or acts like they are too busy for you, ditch them. Other brokers won’t waste your time.

Getting a financial advisor is a great way to up your investment game. While there are many of them on the market, you need to be vigilant in who you choose. By recognizing these simple red flags, you are well on your way to making the right choice.

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