How You Can Trust an Investment Firm with Your Wealth

There are so many investment firms advertising their services that it’s almost impossible to know who to trust. But how do you know which firm is trustworthy and won’t take your money and run? In this article, we’ll explain why you should be cautious about trusting just anyone with your hard-earned money.

But don’t let that scare you away from high-quality financial advisors and investment firms, because there are a few red flags to watch for when selecting an advisor or firm with which to partner. In this article, we will discuss the benefits of working with an investment firm vs an individual advisor, what questions you should ask any prospective firm or advisor before signing on with them, and some red flags to look out for when vetting potential partners in your financial future.

Why You Should Be Careful When Selecting a Firm

Firms, like people, can be greedy. But the regulation and oversight of financial firms ensure they act in the best interest of their clients. This is more difficult to evaluate when selecting an individual financial advisor.

Again, greed is a real concern. It’s hard to know whether an advisor has your best interests at heart when you’re in the initial stages of forming a relationship with them. There is a significant difference between greed and self-interest. An advisor may have a fiduciary standard behind them, but that doesn’t mean they will act in your best interest. A fiduciary standard means advisors are legally bound to act in their client’s best interests.

A financial advisor who has your best interests at heart will have your financial situation, goals, and risk tolerance at the top of your mind at all times. They will ask you questions about your financial situation and goals, and they will recommend financial products that are a good fit for you.

Red Flags When Vetting Investment Firms

All firms aren’t created equal, and there are some red flags you should be on the lookout for when vetting potential financial firms. Here are a few: Alarm bells should go off if the firm is not registered with the SEC or your state’s securities regulator. The firm may not be legitimate. Avoid firms that claim to be fiduciaries (i.e., legally bound to act in their client’s best interest) but aren’t registered with the SEC as such. Be wary of firms that solicit business with excessive advertising, particularly if they are running ads on TV. Such firms are often paying to advertise on TV, and they might have to reduce their fees as a result. Beware of firms that don’t have a reputable track record.

The Benefits of Working with an Investment Firm

An investment firm is like a financial department with advisors and analysts who work together to help you reach your financial goals. You might want to work with an investment firm because you may need help in more than one financial area. For example, you might want to work with an investment firm that offers financial advice, retirement planning, and financial planning for your children’s college funds. Working with an investment firm gives you access to the knowledge and experience of multiple advisors who can help you in different areas of your finances.