How to Evaluate Your Financial Advisor
How to Evaluate Your
Financial Advisor
Choosing a financial advisor is one of the most important financial decisions that you will ever make. The person you decide to
work with will be in a position to influence critical investment and planning decisions, and the quality of his or her advice will
heavily influence your long-term financial success. Whether you are preparing for retirement, planning an estate, selling a
business, or handling a wide range of complex financial matters, having the right advisor relationships in place is vital.
Questions to Ask a Prospective Advisor
C
hoosing a financial advisor is one
How to Evaluate Your Financial Advisor
who is constantly learning will provide
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How would you describe your typical client? Listen closely to this answer. What you want to hear is that the advisor works
of the most important financial
you the biggest edge. The best advisors
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with clients
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similar
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if you
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hear the
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decide
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Choosing
a financial
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important
decisions
that
you
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The person you decide to
account
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if
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account
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than
that
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most
clients,
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level will
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will be
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critical
professionals
to
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work with will be in a position to influence critical investment and planning decisions, and the quality of his or her
• Tracking the historic
performance of
investment
and planning
decisions, financial success.
craft. Whether you are preparing for retirement, planning an estate, selling a
heavily influence
your long-term
expect.
your portfolio and investment.
and business,
the quality
of his or a her
will
or handling
wide advice
range of
complex financial matters, having the right advisor relationships in place is vital.
do you
get paid? with
It’s essential
What
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area your
of expertise
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you stay
up-to-date
changing regulations?
to know match
that the
heavily
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• Ensuring It’s
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your risk tolerance
Questions
to
Ask
a
Prospective
Advisor
to
understand
exactly
how
an advisor
advisor
to
whom
you
entrust
your
assets
has
both
experience
and
a
passion
for
financial
planning.
But,
years
of
experience
is an
success. Whether you are preparing for
your portfolio.
makes
money.
Reluctance
to What
discuss
How
would
you
describe
your
typical
client?
Listen
closely
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this
answer.
you
want
to
hear
is
that
the
advisor
works
retirement,
planning
an
estate,
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inaccurate way to judge the quality of an advisor. A better judge of quality is their approach to ongoing education. Since the
is a for
big
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Stress
for major
with clients
with similar
situations
to of
your own. compensation
If you’re preparing
retirement,
the testing
advisor your
works portfolio
with
a business,
or handling
a wide
range
financial
industry
is constantly
undergoing
change,
an advisors
advisor earn
who a is
constantly
learning market
will provide
you
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Typically,
living
through
swings
for both
positive edge.
and The
many
retirees;
if
you
are
a
business
owner,
you
want
to
hear
the
advisor’s
experience
with
clients
like
you.
Ask
the
advisor
about
complex financial matters, having the
best
advisors
are
part
of
groups
or
organizations
that
provide
continuing
education
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financial
professionals
to
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commissions,
management
fees,
by not get the
negative
if your account
is substantially
smaller
than that
of most clients,
you or may
level of trends.
service that you
right account
advisor sizes;
relationships
in place
is
charging flat rates for their services.
hone
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expect.
vital.
There are many reasons why an advisor
• Strategic asset location, charitable
What
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It’s important
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deductions
to
How
do
you is get
essential
exactly how
advisor regulations?
makes money.
Reluctance
to discuss
compensation
is
QUESTIONS
TO ASK
A to understand
would choose one compensation plan
advisor to whom you entrust your assets has both experience and a passion for financial planning. But,
years of
experience
is an
reduce
tax
burden.
a big
red flag. Typically,
advisors earn a living over
through commissions,
management
fees, or by charging flat rates for their services.
PROSPECTIVE
ADVISOR
and of
there
are
inaccurate way to judge
the quality of an advisor. A another
better judge
quality
is advantages
their approach to ongoing education. Since the
There
are
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plan
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system.
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Evaluating
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tax are
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your undergoing
typical
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change, an advisor who is constantly learning will over
provide
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The
important
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always
understand
efficient,
so
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type
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each
system.
The
important
thing
is
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understand
how
you
will
be
paying
for
services
and
how
that
may
client?
Listen
closely
to
this
answer.
best advisors are part of groups or organizations that provide continuing education for financial professionals to continually
how structure
you will be their
paying
for services and
legacy
you want.
What
you
want
to
hear
that the advisor
hone
their
craft.
affect
the
advice
you
will is receive.
Good advisors
compensation
to minimize
conflicts
of interest for their clients
how that may a ect the advice you will
works
with
clients
with
similar
situations
How
do you
get paid?
It’s they
essential
understand
exactly how an advisor makes money. Reluctance
discuss what
compensation
is you’re paying.
and will
always
disclose
how
are to being
compensated.
• F to inding
401(k) fees
receive. Good advisors structure their
to your
If you’re
preparing
a big own.
red flag.
Typically,
advisors for
earn a living through commissions, management fees, or by charging flat rates for their services.
• E there
state are
planning
to protect
another and
advantages
and those you
of interest for their clients and will
advisor
works with
retirees;
you
disadvantages
to many
each system.
The if important
thing is to always understand how you will be paying for love.
services and how that may
You
use this owner,
checklist to
evaluate
your current
advisor how
or to they
vet are
a prospective
advisor. Each of these areas have a dramatic
always
disclose
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to hear
the advice you you
will want
receive.
Good advisors
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their compensation
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of alculating
interest for if their
clients
• C
you you
will
have an
income
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health
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retirement
portfolio,
and
are
vital
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you
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the
kind of legacy
want.
Your
advisor
compensated.
the advisor’s
experience
and will always
disclose with
how clients
they are like
being compensated.
shortfall.
should
educate
you on
each account
of these
items, HOW
empowering
you
to
feel
more
confident
in
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retirement
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financial
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the advisor
about
sizes;
How to Evaluate The Quality of Your Advisor TO EVALUATE
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• Projecting
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items, empowering
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feel more to
confident
plan. your
Your Required
financial Minimum
annuity
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impacts
your
investment
those you love.
What
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area help
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Distributions
(RMDs) through
advisor
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• Tracking
the historic
performance
of your portfolio
and investment.
do you stay
up-to-date
with changing
prospective
advisor. Each
of these areas
retirement.
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if you will have
an income shortfall.
• Income planning
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to measure
how
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Security, pension,
and
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what
401(k)
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that
have
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dramatic
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health
• Ensuring
that
your
risk
tolerance
match
your
portfolio.
•
Evaluating
how
your
insurance
needs when
affect to
your
retirement
annuity income impacts your investment strategies.
Determining
buy
or sell plan.
•
Estate planning
to protect
those you • love.
the advisor
to your
whom
you entrust
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and are
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• Stress
testing
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assets.
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Minimum Distributions (RMDs)
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shortfall.
assets has both experience and a passion
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and
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•
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risk
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portfolio.
retirement.
•
how your you
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want. Your advisor Evaluating
should educate
• R affect
ecommending
a Roth IRA
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judge
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your Required you
Minimum
Distributions
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for you.
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when
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assets.
and negative
trends.
to
retirement.
the reduce
quality tax
of burden.
an advisor. A better judge
to feel more confident
in Recommending
your retirement if a Roth IRA conversion is right for you.
•
• Advising if you need
multiple
• Strategic asset location, charitable gifts, and capital loss deductions • Determining when to buy or sell appreciated/depreciated
assets.
• Evaluating
of quality
is if their
to is ongoing
Your the
financial
your approach
tax strategy
efficient, so you plan.
can leave
type advisor should help
to reduce tax burden.
retirement
models
based
on your
IRA, IRA,
•
Advising
if
you
need
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retirement
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• Recommending if a Roth IRA conversion is right for you.
education.
Since
the financial industry is
you with:
of
legacy
you
want.
• Evaluating if your tax strategy is efficient, so you can leave the type
Roth Plans.
IRA, or Non-Qualified Plans.
Roth
IRA,
or
Non-Qualified
constantly
undergoing change, an advisor
• Advising if you need multiple retirement models based on your IRA,
of legacy you want.
compensation to minimize conflicts
retirement,
you
want reasons
to know
How
to Evaluate
The
Quality
of Your
There
are
many
why that
an the
advisor
would Advisor
choose one compensation plan over
Roth IRA, or Non-Qualified Plans.
3640 Talmage Circle, Suite 100
3640 Talmage
Circle, Suite
100
Vadnais
Heights, Minnesota
| 651.964.3423.
Vadnais Heights, Minnesota | 651.964.3423.
Investment advisory services offered through AdvisorNet Wealth Management (AWM). Great Waters Financial and AWM are not affiliated. Insurance products provided by Great Waters Financial, a Minnesota insurance agency.
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Investment advisory services offered through AdvisorNet Wealth Management (AWM). Great Waters Financial and AWM are not affiliated. Insurance products provided by Great Waters Financial, a Minnesota insurance agency.