Look for a fiduciary. In short, this means the planner has pledged to act in a client’s best interests at all times. Investment professionals who aren’t fiduciaries are often held to a lesser standard, the so-called sustainability standard. That means that anything they sell you merely has to be suitable for you, not necessarily ideal or in your best interest. This point is critical, and should be a deal breaker if a prospective planner is not a fiduciary.
There is a growing community of financial advisors in the United States who believe strongly in the power of the fiduciary standard, and who choose to their clients’ interests above all else. The advisors who embrace the fiduciary standard represent the future of financial advice, where people can rest assured that their advisors always put their best interests first.
FAS’s approach to investing is strategic. Decades of financial market history shows that tactical investing – altering your asset allocation over time in the hopes of outperforming – often underweights the best performing asset classes. FAS’s Asset Allocation models reduce the tactical high risk of error and rely on a strategic allocation across asset classes. But our strategic models are like no others. The engineering behind them builds on three key insights.
After you have covered the basics and want a solid overview at a more detailed level, The Wall Street Journal Guide to Understanding Money & Investing is a great place to start. When you are done with that, your local library or bookstore will contain a variety of magazines covering both timely and general financial services topics. When you are ready to learn about equities, Value Line is a great publication that provides an introduction into how you can begin to research and analyze stocks. Even if you choose not to conduct your own stock analysis, the website is worth a visit.
Beware of market-beating brags. Warren Buffet outperforms the market averages. There aren’t a lot of people like him. If you have an initial meeting with an adviser and you hear predictions of market-beating performance, get up and walk away. No one can safely make such guarantees, and anyone who’s trying may be taking risks that you don’t want to take.
You can certainly go it alone when it comes to managing your money. But you could also try to do it yourself when it comes to auto repair. In both areas, doing it yourself is a brilliant idea for some, and a flawed plan for many, many others. Mastering personal finance requires many hours of research and learning. For most, it’s not worth the time and ongoing effort.
Many RIAs are fee-only advisors, meaning they can’t work off commission or sell a client any investment products that aren’t in the client's best interests. Financial planners don’t have to be RIAs to work under this business model. Fee-only financial planners generally make money via an hourly rate, an annual fixed retainer, or as a percentage of the investment assets they manage on behalf of their clients. They also have a fiduciary duty to their clients over any broker or dealer.