Question by mimicneworleans: How can I get ratings on the top financial management companies?
I want to make a fairly substantial financial investment, but want to do it in a “smart” way. I want to go with the best choice, for me , that I can possibly find and want to make sure that I make a “safe” choice. There are so many “financial counsellors” out there now that I’m a little scared. I want a “top rated” one in all aspects & need some advice on how to go about finding the right one and weighing all my odds before I make this big switch. I currently have it invested with a private counsellor, but am not happy with the situation I’m in right now.
I’m paying substantial fees for the work his company does, & I’m not very satisfied in general. There is no “binding” agreement with them & the way I understand it I’m free to choose another company at any time.

In case it makes any difference, I am a widow & don’t have a very knowledgable background in financial investing.

Best answer:

Answer by bull_rooster_aardvark
Hi mom, fancy seeing you here. I’m just joking of course, but you sound just like my mom except she still is not fed up enough with her current advisor to move on. I plead and plead – one more year of lousy returns and maybe she’ll take this step.

Anyhow, unfortunately I don’t know of any rating agency for financial advisors, and there are so many small ones it would be hard to create a comprehensive one, but I can give you some things to think about.

First off (just my personal opinion here – there are exceptions to this), for my money stay away from anyone associated with a bank or other financial institution, and for that matter stay away from anyone who invests your money themselves (unless you really don’t want to do this part yourself). A good financial advisor should sit down with you, talk in length about your financial situation, and then give all sorts of very specific advice, but its a clear conflict of interest for them to invest the money or even get a fee for investing the money (or be associated with a specific financial institution and therefore be under pressure to reccommend the products of that institution).

Also, I’d advise a smaller firm as your advisor (maybe a one-man operation) but there are some fly-by-night operations, and even a few outright thieves (another reason to handle your money yourself) so be careful.

So, get all the advice you can from them, but then go open an account yourself, and invest the money yourself (and depending on your situation, you may want to be real conservative, just conservative mutual funds and bonds – but the financial advisor should give you specific advice on this).

As to how to find a good one, here is an article on questions to ask (uk article but most of the stuff applies to the US):

http://www.learnmoney.co.uk/advice/advice-01.html

Also here is the link to the “Nat’l Association of Financial Planners”. Within this website is a sample list of questions to ask, and a section where you can find advisors near you (you gotta enter your address info but you can check that you don’t want them notified about you). Unfortunately this only returns financial advisors who are members of this association (duh) and even lousy advisors who are members of the association will show up – but at the very least they are members of this association which is worth something.

http://www.napfa.com/

Anyhow, do web searches on stuff like “find a financial advisor” and you’ll get many other links. Only a few may have useful info, but think of it like a treasure hunt (maybe thats a very appropriate analogy).

Best of luck.

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