In short the answer is no. While a 20-30 year vet who has seen it all would seem like a logical choice. You have to consider where he or she spent their time in the business, and more importantly in what capacity. From my experience most of the people who have made it in the industry for 20 plus years have been those who are the best in relationship building, selling products, and getting assets in the door not necessarily giving advice. The business has changed from selling stocks to providing comprehensive advisory services over the last 20-30 years or so. Some senior advisor change well with the time some do not. Good guidance can come from any advisor regardless of age or time in the business. Whoever you decide to choose young or experienced make sure you have an understanding of what your trying to get accomplished when you sit down for the meeting.
Absolutely not! Look for someone with a CFP designation and other designations that show the advisor is committed to ongoing education and furthering their knowledge. Brightscope has a database that shows what each designation means and how difficult it may be to obtain. Also, independent advisors may be less biased in product recommentions
I think 20 years of experience does give an adviser a more experienced perspective when providing a client with detailed advice. But that experience also should not be the deciding factor rather, it should supplement his professional training, education, and professional certifications which reflect his professional expertise. When searching for your adviser, I think the key factors are finding a fee-based independent financial adviser, one that listens closely to you, and one that has an established investment philosophy. Ask for a few client references and call them. Find out how their experiences have been and how has he communicated with them. This profession has a large number of highly skilled, knowledgeable and experienced professionals who can to serve your personal needs.
While years of experience should not be the primary criteria for evaluating an advisor it may play a part. After I have said this there are many seasoned advisors in the industry that have not kept up with all the choices out there. The question is do you want to have someone teach you how to invest your money or do you want to have someone manage your money for you. These are two very different questions and depending on your answer may very well be two different advisors. If you want to be educated I suggest finding a Certified Financial Planner tm practitioner that will give you advice for a fee and preferably one that will only charge by the hour. When choosing one of these advisors some experience would be helpful as they may bring an understanding of the markets that you can only gain from actually going through them. If you on the other hand want someone to manage your money look for an advisor that is a Certified Financial Analyst (CFA) Ask that they provide you with an investment policy statement. This is a fancy word that outlines what you want to achieve and what they will provide for their fee. It is critical in evaluating whether it is the manager or the market that is not performing well. Whichever route you choose to go it is wise to get qualified advice and talk with several before deciding on one.
I do think there is merit to "experience", but the returns to that experience diminish, in my view, after about 5-10 years. After that, they should have a good knowledge of the mechanics of things. Other things warrant strong examination. Like what is their investment philosophy? How do they get paid? Do you feel they are being transparent with things like fees? Do they have an advanced degree or a certification? Yes, experience matters, but is by no means the only factor to consider.
I don't think so. When you initially interview an advisor, are they focusing more on " You " or " Your Money"? If it's the latter, that's probably what they are mostly interested in. Also, are they using financial jargon that you don't understand? - that's not a good sign. And are they going your pace or theirs? You can also ask them if they will disclose all compensation and conflicts of interest - in writing. And if they are able to serve you as a " Fiduciary" as defined by federal law. Designations are nice, but not a main factor in my view- there are so many of them and some can be acquired by sitting through a three hour course. Take as much time as you need and consider your gut instinct as to whether they are placing your interests ahead of theirs. Best of luck! Evan
I would agree with the other advisors. Having an experienced advisor is important but it is just as important to find an advisor that meets other criteria. An advisor who you feel comfortable with that has the industrial credentials warrants just as much consideration.
Experience is important. But overriding experience, the advisors fiduciary responsibility is a more important criterion to consider. That is, do they put your interests above all others, including their own, or is somewhere else?
The first question you should always ask an advisor is where their fiduciary responsibly lies. Many ‘advisors’ are just sales reps, pushing products that their employer tells them to sell. Their fiduciary responsibility is to maximize the profit of the company, rather than to do what is best for you.
Always ask the advisor to sign a fiduciary oath that puts your interest first. If they cannot, or will not, then I would question why not and look elsewhere. You can find such a planner at NAPFA and Garrett Planning Network. Planners associated with these organizations are required to serve the client first and always do what is in their best interest. (Full disclosure – I am a member of both organizations.)
Hope this helps