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Advisor or Salesperson?




Walk into any bank branch. Ask for investment advice and you'll be directed to one of their "advisors". Advisors is in quotes because most don't actually give much advice.

Financial advisor is a loosely regulated job title. Unlike doctors, accountants and lawyers, advisors aren't required to undergo years of training and education. Look up job postings on Linkedin and you'll see most don't require a college degree. Pass a licensing exam or two and you're in.
These exams represent the bare minimum in financial knowledge and on their own hardly qualifies someone to provide advice.

Look even closer and you'll notice most positions are commission-based. So the motivation is not to help you but to drive you towards the most profitable products. This means high-fees and overly-complex strategies, which typically equals poor performance.

In addition, most advisors are not held to any fiduciary duty. Meaning they are not required to look after your best interest. This plus the commissions is a recipe for super bias advice.

There are good financial advisors out there, you just need to do your research. Don't simply settle for the first one to smile at you. Look at qualifications and understand incentives.

How much experience do they have?

What is their education level? Any designations?

How do they get paid? Are they fees-based or commissions-based? 

Can they provide references?

Ideally you'll want someone with at least 5 years of experience, have a degree in finance or accounting and have acronyms like CFP (Certified Financial Planner), CFA (Certified Financial Analyst) or CPA (Certified Professional Accountant) next to their name.

You'll want someone who's fees-based. Meaning they get paid the same regardless of what products they sell. This removes the conflict of interest inherit with commissions.

You'll also want references from existing and past clients. You're hiring someone for an important job, be thorough. Shop around to find the right one.

None of the above guarantee the perfect advisor but will help you ask the right questions and get you going in the right direction.











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