I don’t feel like I know enough to put my money in the right places to make the most of it. I’d like to see a financial planner for help. I’ve searched on the Internet and there are several near me that get good reviews so I don’t know who to choose. How and where can I find someone that will be best?
I don’t feel like I know enough to put my money in the right places to make the most of it.
If your questions are:
- Roth vs traditional 401(k)?
- Roth vs traditional IRA?
- Backdoor Roth?
- How much term insurance do I need?
- Do I need long term disability?
- Do I need an umbrella policy
- Should I buy a house?
- High deductible insurance policy?
- HSA vs Flexible account?
- Should I invest in a 529?
Then you are looking for somebody who for a fixed price will setup the framework for your finances. They can determine which things you should be investing in, and how much. They will then let you decide which insurance company, or which mutual fund to pick. They will not sell you specific investments or policies just describe the framework.
If you are looking for somebody to pick the stocks for you, or to sell you a mutual fund then you will be looking for somebody with a long documented history of success. Unfortunately most advisors don't have that long history of success when compared with just selecting index funds.
I've been a retail investor for 40+ years and a retail trader for the past 20 years so I've learned a bit about financial markets.
About 5 years ago I considered turning much of this over to a money manager. I met with a decent number of them in my area and other than one of them, I was not impressed with their knowledge or ability. They glossed over or omitted details like market drawdowns while exaggerating performance. Some offered cherry picked accounts to demonstrate proficiency - for example, showing account performance since March 9th, 2009 (the end of the 50% drop in the market).
Apart from that, for me to have gone forward with any of them would have required their getting close to duplicating market performance AND losing less in down markets. If you can do that, you're worth your fees. None of them did so nor did any of their recommended funds.
About the only way that I could trust an advisor would be if he came highly recommended from a family member or trusted professional such as my lawyer or accountant AND they provided an audited track record with acceptable performance.
FWIW, I still do it myself.
Other answers may tell you how to choose an advisor or financial planner, but for my answer I'd like to focus on how to eliminate ones that you should not do business with after you come up with a short list of possibles. FINRA, the Financial Industry Regulatory Authority, maintains a free service called BrokerCheck.
Go to https://brokercheck.finra.org/ and enter the required information for any broker, advisor or financial firm to see information about their licensure, their disciplinary record including penalties or awards to clients that they have injured financially, open complaints against them, and for financial firms, the number of clients and the total value of client investments under advisement.
The same site gives you links to state regulatory agencies where you may learn even more about a prospective advisor.