WBEZ and the Chicago Sun-Times want to hear your questions about all things money. Then, every Monday, we’ll set out to answer your personal finance-related question.
This week, Levi from Edgewater asked: What qualities should I look for when I’m trying to pick a personal financial adviser?
We asked Shari Greco Reiches, co-founder of Skokie’s Rappaport Reiches Capital Management, for her advice. The firm manages $1.2 billion in client assets, and Reiches is the author of “Maximize your return on life: Invest your time and money in what you value most.”
Meet face to face with a potential financial adviser
While a virtual meeting can be convenient, Reiches said it’s easier to get a feel for someone in person and to see whether you feel comfortable with that person. You want to be able to ask whoever you end up selectiing any questions you might have without any fear. “Finally, you need to go with your gut,” she said. “That’s probably the most important thing.”
Know what you need
The search will be easier if you nail down what you want an adviser to help you with — investments, financial planning or help managing both.
Understand their approach to financial planning
Reiches recommends asking potential advisers for examples such as any tools they use when helping clients. She said anything that’s on your mind — insurance, coordinating with an estate planning attorney or taxes, Social Security — make sure they have the skills to help you with planning things that you will need.
Ask how they are paid
Financial advisers should be transparent about how they get paid. There are several fees worth looking at, according to Reiches. “One is the management fee. So that’s an overall fee that they may charge.” Another is underlying investment fees like trading fees, custody fees and whether financial planning is an extra fee.
Interview a few advisers
Speaking with multiple advisers can help figure out what you like or don’t when it comes to a person’s approach to financial planning. Ask for references because having someone help manage your finances is a big decision. “Obviously, they’re going to give you happy clients, but you want to just talk to some of the references before you make a final decision,” Reiches said.
Why hire a financial adviser?
An adviser can take the emotion out of investing and financial planning. “A good financial adviser will be open,” Reiches said. “You’ll have a good rapport. You’ll be able to exceed your financial goals if you work with an adviser that has all the things that I just mentioned.”