As you may already know, investing your hard-earned money can be daunting. No matter what stage of life you are in, putting your money in someone else’s hands is never a comfortable decision. However, working with a credentialed professional who provides advising and investment management may not be nearly as risky as handling your own investments.
Before signing the paperwork, there are a few things you should know:
Do Your Research on Investment Professionals
If you are worried about the possibility of putting your money in the hands of the wrong person, you should make sure your investor is constantly continuing his or her education. There are many, many rules involved with investment management and you should be easy to find out if your advisor has gone above and beyond what’s needed in order to stay current.
Additionally, you can also research an investor’s qualifications and history by going to http://www.investor.gov or www.brokercheck.org. These databases provide employment and disciplinary history about financial advisors, as well as their certifications and licenses. One thing you may not know is that the U.S. Securities and Exchange Commission prohibits online reviews of investment managers, considering them to be “testimonial” in nature. This is the reason you can’t find reviews for investment managers. Even if you feel you’ve found the right investment management team after your first meeting, you should still take the time to do your homework in order to reduce your risk and provide you and your family peace of mind.
Be Skeptical of Overly Optimistic Investment Managers
While it may seem obvious, you should always be skeptical of professionals who make overly optimistic promises about the returns you can expect with your investments. Choosing someone who displays honesty and is straightforward with conversation right from the beginning is what you want to look for. Again, do your homework here. Take the time to check out the company website and look for ethical cues, such as giving back to their community. You can also dig around a little to find out how long team members tend to stick with the firm.
Long-term Investing is the Key
If you know anything about investing, you are probably aware that many investors out there talk about staying in the game for the long haul, and even investment legend Warren Buffett is a major advocate of this strategy. With all this in mind, working with a professional that has an investment management philosophy that aligns with you may just be what helps you reach your goals.
