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Investments

Do Your Homework Before Hiring An Advisor

Many people are tempted to hire the first financial advisor they meet, some get a recommendation from family members or friends and most don’t run a full background check.

Make sure you're not entrusting your college, retirement, or life savings to the wrong person.

How To Find A Good Financial Advisor

  • Check references and background: Just because someone seems to have or spend a lot of money doesn't mean this person will do a good job handling yours. Fancy cars and rich clients don't guarantee a good advisor. And just because an advisor has been interviewed by the media doesn't mean he's on the up and up. The Securities and Exchange Commission (www.sec.gov) and the Financial Industry Regulatory Authority (www.finra.org) provide assistance in checking up on advisors.
  • Avoid relying on friends and family: Industry surveys show that more than 40 percent of all people take financial advice from friends, family and business associates. It's better to keep friends solely as friends and get your investment advice from a professional you don't already know on a personal level.
  • Don't base everything on returns: Choose an advisor who offers long-term performance and who will allow you to ride the market's ups and downs without being overly risky. Achieving investment success means participating in market gains during good times without losing everything if it goes down.
  • Don't let credentials sway you: There are numerous professional credentials and designations for financial advisors. Each credential is different and some are legit; some not so much. Although it's important to check credentials, your quest should be to find the right person, not the right credential.
  • Interview more than one candidate: Most advisors will tell you they can solve your money problems. Talk to several advisors and base your decision on a background check and other information you find.
  • Realize that cost and payment style should be just part of your decision:

    Even if you save money in fees, working with an incompetent advisor means losing more money down the road. If you take a more expensive route, you might not get the quality of service you desire. Examine what you'll get for your money and find a reasonable balance between services, costs and compensation. Also consider how much depth of advice you require. You might not need to spend a lot if you're just looking to put money into a mutual fund each month, but if you need an analysis and a financial plan, it might not be worth going the cheap route.

When looking for the right financial advisor, PrimeWay Federal Credit Union has investment experts ready to assist you today.

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