How Do You Find a Financial Advisor? (Part 2)
Find out the best places to find financial advisors, tips to research their backgrounds, and how to prepare to meet with them for the first time.
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How to Find a Registered Investment Advisor (RIA)
If you’re looking for investment advice, a Registered Investment Advisor or RIA has a fiduciary duty to act in your best interests, while a stockbroker does not. Though you can find an RIA in a variety of financial firms and institutions, a good place to search for one is adviserinfo.sec.gov.
An RIA must disclose details about their services and fees by filing a Form ADV with the Securities and Exchange Commission (SEC) or their state securities agency, depending on the amount of assets they manage.
Many aspects of personal finance are complex and may require too much of your time to master.
Advisors are required to give you a copy of their Form ADV before you hire them—so, be wary of any who don’t. But you can also request a copy from the SEC (at adviserinfo.sec.gov) or from your state’s regulator to review before meeting with an RIA. You can get your state’s information at the North American Securities Administrators Association website at nasaa.org.
Once you’ve investigated the registration and record of an RIA, make sure their firm is a member of the Securities Investor Protection Corporation (SIPC). This organization provides customers up to $500,000 of coverage for cash and securities if your investment firm goes out of business or engages in fraud. But remember that the SIPC doesn’t insure against losses due to a decline in the market value of your investments.
Use my same advice as choosing a financial planner: Interview several RIAs by asking questions about how they work and what they do to help clients. Most RIAs charge a percentage of your total assets under management, in the range of 1% to 4%.
See also: Is There Insurance for Your Investments?
Once you begin to accumulate assets, like cash, investments, and real estate, you need to have a plan for what will happen to them after your death. Since a big part of estate planning involves creating legal documents, it’s best to work with an estate attorney.
How to Find an Estate Planner
There are many websites that match consumers with attorneys, but a good place to start is nolo.com. You can search for the type of lawyer you need by zip code. It’s important to work with an attorney licensed in your state, since laws vary widely depending on where you live.