Questions to ask an investment advisor before hiring

The most important part of hiring an investment advisor is to make sure that you have the right questions prepared, before meeting with them. If you take the time to do your homework, before meeting with prospective investment advisors, you are much more likely to choose someone who will be proactively engaged in helping you achieve your financial goals. It can be very helpful to categorize the questions, to help you keep the information organized.Here are some very important questions to ask an investment advisor before hiring-

Questions about background and education:

1. Tell me about your professional background
2. What do you think about your background, makes you well suited to meet my investment needs and goals?
3. Where did you go to school? What degrees (undergraduate and advanced), to you hold?

It is advisable that you get a list of the degrees that the investment advisor holds. Make sure that you get both the name and location of the institution, the year of graduation and the major field of study. If you decide to hire this person, you should contact at least one of the listed educational institutions, where the degree was granted, in order to confirm the accuracy of the information that you were given.

Questions about specific training in financial planning and investments:

1. What did you learn about investing and financial planning, at the educational institutions that you attended?
2. Do you receive continuing education?
3. How do you stay current with your industry and possible new developments and changes?

These questions are designed to help you learn how much the investment advisor actually knows about financial planning, investments and other aspects of the financial world. Keep in mind that even if the investment advisor seems knowledgably, he or she should still be able to give you the information in a way that is clear and understandable. In addition, keep in mind that a current trend, for investment advisors, that is being used, is known as "storytelling". The purpose of this is to be able to effectively and clearly communicate important concepts to potential clients. However, this approach can be oversimplified and act as an emotional manipulation, for the selling of financial products. You should decide on your own, whether your potential investment advisor, know the substance, behind the story, and doesn't just tell a good story.

Questions about work experience:

1. What work experience do you directly have that is related to investment issues? Do you have other work experience, as well?
2. How long have you been working in this industry?
3. How did you get started working as an investment advisor?
4. Why do you want to be an investment advisor?
5. What other companies have you worked for? How have they influenced your work as an investment advisor?

You should keep in mind that each investment advisor will have a different background, and prior experience. There is not right or wrong answer to this question. However, you should be comfortable with the experience that the investment advisor has and should pay attention to exactly how he or she relates that experience to you.

Questions about licenses and certifications:

1. What licenses do you currently hold? How long have you held them? What organization were they granted through?
2. Do you hold all required local, state, or federal licenses?
3. Do you hold any professional certifications and/or designations? What did you have to do to do to receive them?

The bottom line here is that you must get all pertinent information, and then check it out yourself. This will prevent you from being the victim of an unscrupulous investment advisor. If the investment advisor hesitates to give you any of this information, take it as a red flag and move on to someone else.