Especially when you are seeking investment advice, a firm with the latest in technology, research and systems support can be important, Lewis said. Take Hemisphere Trading Co. of Memphis, which filed for Bankruptcy Court protection from its creditors earlier this year. The independent investment firm apparently lost millions of dollars of investor money before halting business late last year. And, if clients are hit with such losses unjustifiably, a substantial firm that has been in business for some time has the resources to deal with such an event, Lewis said. Ask to talk to at least three whose circumstances are similar to yours, he said.
Nothing seems to trigger more debate in planning and advisory circles than how people are paid.
Your preference should be one factor in your decision. But whether an adviser charges a fee, earns commissions or gets a combination of both, the key issue is complete and honest disclosure of that method, Brandon said. You also want to check the fee schedule to help you decide if the cost of the services seem reasonable for the benefits you expect to get, he said. Keep in mind that someone who earns money from selling you a product has a potential conflict you need to know about, Carrick said. That doesn't make it wrong or unethical, but it is information you need to evaluate your decision about hiring the adviser, he said.