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Whichever kind of financial advisor you believe fits your needs, use your business acumen to find the best one, just like you'd find the right vendor to supply your business.
Getting referrals is a good way to start, suggests Barnes. Ask your business associates, banker, friends, family - any knowledgeable person you trust to make a recommendation.
Keep in mind, though, that your needs may not be remotely similar to your next door neighbor, best friend or even your business partner. Ask what that advisor did for the person to match compatibility with your needs. A financial advisor who primarily helps families, for instance, may have little experience with small-business owners.
Don't stop with just one referral, either. "Shop around and get the opinion of several planners," Barnes says. Advisors likely will suggest different financial routes, based on their professional backgrounds and experiences. By talking with several, you'll pick up ideas that will help you hone in on the kind of guidance you most need.
Ask pointed questions when searching for an advisor. After all, it's your money, your business success and your financial future at stake. Quiz them about client selections and portfolio performance over the last three years - and get supporting documentation.
"Always ask why. Don't just accept what they say," Barnes stresses. "Ask why they selected an investment option, what was its risk at the time, why it performed the way it did, how they feel about it now and in the coming year."
Questions like those will help determine the skill of potential advisors, which Barnes notes is vital because "the biggest risk in any investment is the person sitting across from you. Their skill makes money for you or loses it."
The advisor candidate should also ask questions to learn about your financial goals and time frame for accomplishing them. "It's very important they write down what you say and pay attention to what you want before suggesting what they can do for you," Brown says.
Don't forget to discuss an advisor's investment philosophy. Everyone has a level of risk with which they're comfortable, and the advisor should respect yours. "This person is your coach. Your want the coach's philosophy to match yours. What's aggressive to one person isn't to another," Barnes points out.
Pay attention also to how you interact with each advisor. Can you converse easily? Do you feel comfortable sharing the most intimate financial details of your business and personal life?
Check out advisors' credentials and certifications, which ensure reasonable knowledge in the field. Most of the credential-issuing organizations also require substantial continuing education to retain certification. An accountant, for example, should have earned the CPA designation. A stockbroker should have the Series 6, 7 and 13 securities licenses from the National Association of Securities Dealers. A tax lawyer must have passed the bar exam.
Absence of complaints is important as well. Call the local Better Business Bureau. If you choose a stockbroker, you can find whether there have been complaints from the federal Securities and Exchange Commission by calling (202)942-7040.
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