photo by  emdot

Our financial advisers at Paragon Wealth Management have written articles with tips on the best ways to select a financial adviser. They recommend asking these five questions before deciding which financial adviser is best to hire for your asset management.

1- Is the financial adviser fiduciary? Does the adviser have fiduciary responsibility?
2- What is the adviser’s experience? How many years have they been managing money?
3- What is the adviser’s track record? Can they show you their performance history?
4- Is the adviser paid on commissions? If so, you should not talk to them.
5- Does the adviser charge a surrender fee if you decide to leave? They should not charge a surrender fee.

To add onto this list, I would like to add these seven questions from the Wall Street Journal. Some of them are similar to the questions above. 

Excerpts taken from the Wall Street Journal on April 13, 2009

Seven Questions to Ask When Picking a Financial Adviser
Written by Shelly Banjo

1- What is the adviser’s background? Wayne Cooper suggests, “thinking like an employer.” Look at the potential adviser’s criminal and regulatory record as well as references from past employers.

2- What do the adviser’s clients say? Don’t depend on the reputation of a big firm or recommendations from friends, family, etc. Ask the adviser’s clients. They might have a different story.

3- How does the adviser get paid? This will help you know if the adviser is working in your best interest.

4- Where are the adviser’s checks and balances? When you purchase investments, make sure you are writing checks to a third-party custodian, like Fidelity Investments Co. or Charles Schwab & Co., not to your financial adviser directly. Also, find out what auditors the adviser’s firm uses.

5- What is the adviser’s track record? The adviser should be able to show you a track record. Don’t let them use an excuse of why they can’t show it to you.

6- Can the adviser put it in writing? Ask for a formal written outline of the services the adviser will be providing and what fees you will be paying.

7- What do other pros think? It’s imperative that you double-check any big moves-especially in this turbulent economy. That means knowing the basics behind your investments, insurance, estate planning and taxes and then turning to other experts for confirmation.

photo by stopnlook

Sometimes people ask us what the difference is between money managers and financial planners. This is our typical answer:

Money Managers- usually have more training. They actually manage the assets such as a mutual fund or a hedge fund. They make investment decisions, build portfolios and creat investment strategies. If you need to meet with a money manager, it is best to talk with a Chartered Financial Analyst (CFA) because they have more training.

Financial Planners- this term is used very loosely. Almost anyone can call themselves a financial planner. They usually gather your information and then try to sell you products because their pay is based off of comissions. It is better to talk to a Certified Financial Planner (CFP) because they have more training.

At Paragon, we have money managers such as Nathan White CFA, who is our Chief Investment Officer. He actively manages our clients’ money and continuely finds ways to improve our investment strategies and investment processes.

Paragon’s money managers are not paid on commissions, and do not sell products. If you would like a financial plan, our money managers gather your information and give you a plan based on your personal goals and objectives without trying to sell you something you don’t need.

photo by emdot

There are several reasons why a person might need or benefit from investment services. Here are a few.

1. You don’t the time or interest to follow the stock market regularly to make your own trades.

 2. You don’t have the resources and investment information to make wise decisions to invest your money on your own.

3. You need help reaching specific financial goals, like paying for your children’s education or preparing for a comfortable retirement.

4. You’ve been putting your money in bank CD’s, and you are ready to do more with your money.

5. You want to put your money away for a few years and not worry about it, but you don’t have the expertise to do it yourself.

6. You want to take the emotion out of investing and let a professional handle it.

This list could go on, but these are some of the main reasons.