How to Find a Financial Advisor Who (Really) Meets Your Needs

By Yann Kostic and Tom Zachystal from the August 2017 Edition

Many, if not most, investors do not have the expertise to make all their own investment decisions, and therefore would want to consider talking to a reliable financial advisor. While nothing can guarantee a financial advisor’s reliability, there are some things you can look for.

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Investigate your advisor’s background. While the website of the Financial Industry Regulatory Agency, www.finra.org, will tell you which states many advisors are registered in, along with exams passed, licenses held and employment history, not all information is accurate or up to date. Use this tool to verify whether an advisor is registered. You can also check the Security and Exchange Commission website: www.sec.gov/reportspubs/investor-publications/investor -brokershtm.html.

Try to evaluate the advisor’s track record. While different clients will have different investment goals, you can ask how the advisor’s other clients performed relative to their benchmarks. It is somewhat useful but remember that, in financial markets, history cannot be used to predict the future.

Learn how the advisor makes decisions. While performance is important, the decision-making process is even more so. Basically, you are looking for someone (or a team) who is consistent.

Understand how the advisor is paid. Different advisers are paid differently. Brokers receive a commission on the transaction: i.e. the securities they buy or sell, while advisers usually charge fees, either flat, hourly or based on a percentage of assets under management. Be sure you understand and are comfortable with the fee structure.

Understand fiduciary responsibility vs. suitability. All advisors are required to sell you “suitable” products, but advisors who also take an oath of fiduciary responsibility are legally bound to act in your best interest. Be sure you are comfortable with your choice. This is definitely the most important part. If you come out with only one point, make sure it is that your advisor has a fiduciary duty.

Make sure your advisor really understands your international situation. If you are an expat, or live across several countries, make sure your advisor specializes in this type of situation, which is inherently more complex. This point might be the second most important one but, alone, might save you a ton of money (hundreds, possibly thousands) in currency conversion alone.

Get it in writing. Ask for a formal written description of the services the advisor will provide for you and the fees you will pay.

Note: This material has been prepared for informational purposes only, and is not intended to provide financial advice for your particular situation.

Yann Kostic, MBA and Tom Zachystal, CFP, are Presidents of their respective Assets Management firms, both US-Registered Investment Advisors (RIA). Tom is the San Francisco Financial Planners’ Association President. Tom and Yann cater to US ex-pats in Mexico and worldwide. Comments, questions or to request his newsletter, “News you can use” contact him at yannk@atlantisgrp.com, in the US at (321) 574-1521 or in Mexico, (376) 106-1613.

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