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A lot of women wonder how to hire a financial advisor, or perhaps they already work with one, but they still aren’t sure about the best and most effective way to lead in this role. The often overlooked reality is that if you are working with a financial advisor, you have either already hired them or you will be hiring them. When you hire someone for anything, you’re being a leader, and that can feel scary, especially when it comes to your life savings! But there is an art to knowing how to hire a financial advisor…
The thought of hiring an advisor can seem completely daunting. Unfortunately, advisors are often hired in the middle of a personal crisis when someone feels an urgent need for an advisor, For example, after a death, inheritance, or divorce. I have been there and done that, so I get it. That’s why I created a list of important questions for the interview process! In this article, I’ll share one of the most important things a woman needs to know when making a decision about which financial advisor to hire from the many choices. This question comes right from my own personal financial advisor interview questionnaire. (You can get the entire list here.)
Question number 4 on my financial advisor questionnaire is: What are your credentials and licenses?
The Caveat
A financial advisor will have one or more initials after their name; these are the credentials. Here’s the thing that’s tricky about credentials: a financial advisor can have over fifty different possible credentials! It’s no wonder that it’s difficult to understand this person’s level of expertise. But, understanding is important since you are essentially trusting this person with the task of taking care of your life savings.
Here’s a great insight: Ask not only what their credentials are, but also ask for an explanation on this credential. It may even be smart to Google the specific credential so that you can have a good understanding of it. That way, you’ll be able to make an educated decision on whether or not it is a good fit for what you need.
Credentials as Expertise Clues
Credentials are a clue to an advisor’s specialty or area of expertise, experiences, licenses, and abilities. When you discover this, you’ll be able to see if this person is a good fit to manage your money, because the credential focus can vary. For example, one credential may be related to divorce expertise, another tax expertise, and yet another related to overall planning. Insurance, stock markets, or estate planning are other common areas of focus for financial advisor credentials. You can see how important understanding this is.
Also, ask if experience is required to obtain that credential. Some credentials require years and years of hands on experience with wealth management, while others are much easier to acquire.
Remember, credentials don’t guarantee that you’ll get the performance results you want from your investments. Reaching your financial goals easier is the point of working with a financial advisor. In another post, I’ll explain more about how to understand investment results, but knowing credentials is a precursor to performance in order to streamline your financial advisor selection process.
Are you wondering how to hire a financial advisor? Then you’ll definitely want to grab the full list of my financial advisor questions here so you can walk into your financial advisor meeting and interview with confidence and poise.