Managing money is not an innate skill and often it makes sense to turn to expert help. Whether you’re looking for help with your taxes, choosing investments for your retirement savings, or managing multiple saving goals, financial professionals can help you explore alternatives and strategies to best manage your finances.
However, choosing a financial professional is a scary proposition for many people. It can be hard to decide who you want to trust with your money and your future dreams. Unfortunately, government regulations do not protect the consumer very well in this area. Anyone can call themselves a financial adviser. Taking a little time to investigate financial professionals before you begin working with someone will allow you to make an informed decision.
First, think about what services do you need. This will help you identify a financial professional who has experience and education that matches your need. For example, if you are 24-years-old and are looking for investment advice, then you may not want to choose someone who specializes in estate planning for 80-year-olds. Or, if you need advice about filing taxes for your small business, then you need someone with tax expertise.
Are you puzzled by all the initials following financial professionals’ names? University of Illinois Extension’s website, Choosing a Financial Professional, includes a Guide to Financial Credentials. This in-depth table lists many financial credentials and information such as the education required to receive the credential. You may want to start your research into financial professionals here.
At this website there are also links to several online searches that can connect you with financial professionals in your community. You may also want to ask friends or other acquaintances for suggestions of financial professionals.
However, no matter who refers you to a financial professional, take the time to interview two or three people to find one that is a good match for you. Ask specific questions such as how much and what type of continuing education does the person you’re interviewing engage in on a regular basis? The financial world, and related laws and products, change at a rapid pace; continuing education is essential. How is the financial professional paid? Is the financial professional’s income fee-based or commission-based? You have the right to know how much financial services will cost and how they will be calculated. At the Choosing a Financial Professional website you can download a free Interview Guide to help you think of questions to ask.
Even if someone is the perfect match for your Uncle Fred, it doesn’t mean that they are the right financial professional for you. Be sure you’re comfortable asking questions and talking to the financial professional. You want someone who can explain things in a way that makes sense to you.
One last, but important, step: Once you narrow your choices, check the financial professional’s background and references. In Illinois, check a person’s licenses and disciplinary records by calling the Illinois Securities Department, toll-free 1-800-628-7937. If someone is helping you buy or sell investments, you do want to be sure that they are licensed to do so in Illinois.
If you have more questions about choosing a financial professional or other financial matters, please visit our Plan Well, Retire Well blog, or contact us at FinancialWellnessUIE@gmail.com or call (217) 333-7672 for more information.
Written by Kathy Sweedler, Consumer Economics Educator, University of Illinois Extension