Money. Whether you have a little or a lot of it, it’s yours and you’ve worked hard for it. When it comes to choosing how to save and where to invest, you may not be certain of what to do. So, you call in the experienced professionals—financial advisors, wealth management folks, people who are trained in the art of pursuing growth for your account and diversifying your portfolio. According to longtime CERTIFIED FINANCIAL PLANNER™ and Managing Director of Level Four Wealth Management in Birmingham, Alabama, Stephen Iaconis, the problem is, as is the case with most situations involving “advice,” you can receive some questionable instruction with what to do with your wealth.
“When it comes to financial advice, the ‘bad’ can cost you in serious ways in the long run—ways that can make the difference in how you’re able to retire,” he says. “Before you entrust your money with a financial advisor or specific wealth management institution, you should be able to identify a few significant red flags that can alert you to improper financial advice.” Here are some tips Stephen Iaconis recommends you consider to appropriately protect yourself from self-serving financial gurus:
1) In order for someone to understand your financials, they have to understand your financials.
You know how you’re not supposed to dive into water without knowing its depth first? It’s impossible for you to receive sound advice with where to invest your money without your financial advisor delving into your finances. If an advisor takes one look at you and starts spouting off advice—even if it sounds smart—consider it a red flag. Iaconis asserts that your financial situation should be examined without any product mention before you can even receive even a single sentence’s worth of financial advice. “They’re going to need to truly assess your financial picture before they’ll even begin to know what to do to help you,” he said.
2) Speaking of product mentions…
If you feel as though you’re being “sold to,” you probably are. Some advisors package insurance products as investments and likely fail to mention to the clients that there are kickbacks for them because they hawked a particular product to you. Insurance is primarily used for protection, and while it is a wonderful tool, other channels tend to be better at building wealth. When it comes to planning your finances for retirement, you want to have enough to not only survive, but thrive. Look for an advisor who has your financial needs and best interests at heart, via their actions not just words, instead of one who’s pitching products at you. And remember, it’s your money—this is absolutely the time to say “no” to the pushy salesperson.
3) No credentials? No dice.
Financial advice is a complicated arena—one that involves investment and retirement planning, estates, taxation, real estate, college saving, and several other aspects that will affect how comfortably you’re able to live in the future. Iaconis stresses that the financial planner you select to help you manage your wealth should be credentialed, stating, “There’s a code of ethics involved in becoming certified. Your certification holds you to a particular standard—the act of giving objective financial advice.” Two of the main certifications for financial planners are:
- A CERTIFIED FINANCIAL PLANNER™ (CFP®) is required to take college-level financial planning courses and have three years of experience in financial planning, then pass a 10-hour examination.
- A Chartered Financial Analyst (CFA) studies security analysis, stocks, bonds, investment management, and corporate finance.
These are two of the main designations that attest to your financial advisor’s expertise and hold him/her to a prescribed standard.
Know the difference between being coached versus being coerced. Trust your instincts, and avoid the pitfalls of a pushy financial advisor. “There are good, dedicated financial advisors out there who are committed to advocating for your financial well-being,” says Iaconis.
Stephen D. Iaconis, CFP® is a registered representative with, and securities are offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Level Four Advisory Services, LLC, a registered investment adviser. Level Four Advisory Services, LLC and Level Four Wealth Management are separate entities from LPL Financial.
Investing involves risk including loss of principal. No strategy, including diversification, assures success or protects against loss.