Recently Goldman Sachs executive Greg Smith resigned from the company and openly criticized the firm and some of its business practices in his resignation letter. The majority of his criticism centered around his former company's pursuit of profit which frequently came at the expense of the firm's clients. A recent article written by Dan Kadlec for Time gave some great guidelines on "How to Vet Your Financial Advisor". He gave a three step process outlined below:
*Gather a short list of names: Dan Kadlec suggested starting with references from those you trust. Asking friends and family members who handles their money and hearing first hand their experience should give you a good start.
*Interview each planner: Your financial advisor should be focused on you as the clients and your needs instead of your money. Another key to find out during the interview is how the advisor gets paid. Are they receiving a fee on the money that they are managing, are they commissioned based on products sold, or is a combination of the two? Dan stated that fee-only planners are generally a good choice.
*Investigate top choices: Potential clients can research investment adivisory firms through the Securities and Exchange Commission (SEC) Adviser Public Disclosure website. Investment advisers Form ADV gives important information regarding the firm. It lists the amount of money the firm manages/ how many clients it has, and lawsuits & arbitration against the firm among other things.