7 Signs You Can Trust Your Broker


Many of us need professional help when it comes to planning for a sound financial future. This is the primary reason why you should consider hiring a financial broker. According to the data collected by the Certified Financial Planner Board, more consumers are hiring financial advisors as time progresses. However, some consumers feel that the current laws do not protect them shady counselors.

When it comes to financial brokers, it’s fair to say that there are plenty of bad eggs in the basket. It’s vital to mention that working with an unethical broker can put your hard-earned money at risk. Fortunately, there are some advisors that believe in honesty and integrity. We will now take a close look at seven signs that show you are working with the right broker.


1. Experience


How long has the prospective broker been in the industry? If the advisor has less than two years of experience in the investing arena, you should be leery about working with them. There’s a strong possibility that they will tell you to put your money behind a high-risk investment opportunity. This is an easy way to lose your investment capital.

You should consider working with an advisor who has at least ten years of experience with investments. An experienced broker knows that investing is a not a sprint, it’s a marathon. They focus on making sure their clients will have a sound financial future.

Here are a few questions to ask the prospective broker:

-Can you tell me about your educational background?

-What inspired you to become a financial broker?

-Do you prefer managing small accounts or large accounts?

-Are you a member of a financial investment organization?

The answers to these questions will help you learn more about the advisor’s experience and commitment to their clients.


2. Your Advisor Makes an Effort to Educate You About Investing


Some brokers will use industry jargon to impress their clients. In their eyes, this seems like a good strategy. However, this can confuse their clients and make them feel uncomfortable.

A good advisor will not pressure you into buying a certain mutual fund or stock. They will present your options and explain them in detail.


3. Your Broker Explains the Risk


There is an old saying, “The higher the risk, the higher the reward.” You must keep this in mind when you are ready to make a move. It’s also imperative for you to remember that it is your advisors responsibility to divulge the risk associated with each investment.

You are working with the wrong advisor if they try to downplay the risks associated with investing. A good broker will talk about the risk and show the numbers. They want you to know what you could earn or lose with each investment.


4. You Understand the Fees


Financial brokers expect to make money from offering their services to you. There are several ways they can make money. Advisors can earn commissions from selling investments. They can earn a fee from the assets that are under management, or they can take the hybrid approach to generate income.

Many consumers prefer to deal with fee-based brokers. Their fees are based on the investment’s performance. If you do well, your advisor does well. In short, it’s a win-win situation.

Commissioned driven advisors are well-known for pushing certain investments on their clients. They know these types of investments will yield a higher commission.

Transparency is the key to having a successful relationship with your advisor. Your broker should be upfront about their fees. If they are, you are working with an ethical counselor.

Shopping around will help you find a broker with reasonable fees. A good advisor knows the industry is competitive. They will not hesitate to offer you a fair package for their services.


5. Your Broker Makes a Request for Regular Meetings


When it comes to your investment portfolio, you should have regular meetings with your broker. Some advisors only want to meet with their clients when they are ready to introduce a new investment opportunity to them. A good advisor pushes for regular meetings. They want you to ask questions and address your concerns.

How many meetings should you have with your broker each month? Many financial experts believe that consumers should meet with their broker twice a month. Regular meetings give consumers a chance to stay on top of their broker and portfolio.


6. Your Advisor Cares About Your Financial Goals


There’s no magical formula when it comes to investing. Everyone has different financial goals. Your broker should take out the time to understand your long-term goals. This will help them create an investment plan that will help you reach them.

If your broker makes investment recommendations that work against your goals, you should consider terminating the relationship. Your advisor should listen to you and work with your best interest in mind.


7. A Solid Reputation


You should work with a broker that has a solid reputation in the industry. It would be a huge mistake for you to deal with an advisor that takes advantage of their clients.

You must take proper precautions when it comes to working with a financial broker. You should make a change if you are not happy with the advisor’s recommendations.

The advice listed above can help you determine if you are working with the right advisor. Please remember that your financial future lies within your hands.


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