We continue to see new highs in the market. Last week, the Senate passed the USMCA, the trade deal with Canada and Mexico that will replace NAFTA. China and the US signed the Phase One trade agreement. And the first week of corporate earnings reports has been largely positive, which is a good indicator of a strong economy. Retail sales rose in December, and unemployment remains at historically low levels.
If all of this economic news makes you want to get your financial life in order, working with a professional can be a good approach. Just like a trainer helps you focus your workouts, a financial advisor can help you make wiser choices with your money. But how do you find one?
Start by figuring out what kind of help you want. Do you want someone just to manage your investments, or a planner who will help with health insurance, estate planning, taxes, and so on, in addition to investments? Once you know that, ask around. Don’t just ask for a recommendation – ask what kind of service your friend receives from their advisor. If you want a planner, is your friend’s advisor actively planning for them, and updating that plan at every meeting? Did your friend call for advice the last time they received a job offer and negotiated it? Have they been available to review health insurance options during open enrollment?
Once you have some names, do your research. Google the advisors, check out their websites, and be sure to run a broker check on them. Go to www.finra.org and type in their name. A long list of complaints, or any terminations, suspensions or fines should be a red flag.
Then, interview several advisors. Some things to look for include how long they’ve been in the industry. Look for someone who has been through a market downturn, and had time to learn some of the nuances of managing money. Ask about additional certifications or designations they’ve earned. The licensing tests that allow someone to manage money don’t focus on financial planning; they’re more about the regulations and laws that govern the industry. A CERTFIED FINANCIAL PLANNER™ professional, or someone who has earned the CFP® designation, has gone well beyond that. The certification requires a bachelor’s degree, 8 additional courses, and a test that covers employee benefits, home and auto insurance, social security, estate planning, business formation and taxes. The designation also requires ongoing continuing education.
Another thing to talk about is how the advisor gets paid, and how transparent they are about that. Next week, we’ll discuss the difference between commissioned and fee-based advisors, and the legal standards they operate under.
A final point is how much you like the advisor. If you are looking for a planner you want someone you will feel comfortable sharing milestones with. Job changes, births, deaths, marriage, divorce, or a significant illness are all things that impact you financially, and times you need to include your advisor. If you don’t like them, it becomes harder to develop that partnership.
If you’re interested in learning more, our calendar of educational events for 2020 is up on our website, www.covingtonalsina.com/events.
Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Great Valley Advisor Group, a Registered Investment Advisor. CovingtonAlsina and Great Valley Advisor Group are separate entities from LPL Financial.
All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
This information is not intended to be a substitute for specific individualized tax advice.
The opinions voiced in this show are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which strategies or investment(s) may be appropriate for you, consult with your attorney, accountant, and financial advisor or tax advisor prior to investing.