The fiduciary rule that was proposed by the Department of Labor was partially implemented starting June 9. Despite the number of delays and bumps that was faced by the new rule, it has finally come in a positive result. The fiduciary rule is recognized to have a number of loopholes but the main foundation is that the rule mandates financial advisors to decide based on their client’s best interests when it comes to giving financial advices regarding investment accounts for retirement.
While it may be their job to do just that, not everyone is giving the best advice but rather the most suitable option only. If you are wondering how to find the best financial advisor, here are important questions you should ask before hiring one.
- First and foremost, ask if they are fiduciary. This is a very vital question and answers such as a simple yes and no is all that is needed. If they can’t answer right away then this should be a red flag to you. It is important for investors to partner with fiduciaries but it is also fine to work with someone who is not as long as you understand the criteria they are using in making financial decisions as to your investments.
- Ask the financial advisor regarding their means of making money. This is an important detail and one that has nothing to hide should be able to answer right away and briefly. A vague answer could be a tell-tale sign of something lurking behind the curtains.
- Ask regarding the technology they are employing in order to benefit their clients. It is the age of the digital era thus it is only expected that you financial advisor should be updated as well. A tool that employs technology is more efficient and is a proof that they have all of their investors’ financial life figured out with the help of a simple tool.
- Lastly, you will be able to answer your question on how to find the best financial advisor by asking them about what they can do to you regarding taxes. The best financial advisor should be able to help you invest as well as improve your portfolio in a way that can be used for tax purposes.