Every investment carries risk, but Rotarian Kevin Pachucki says the wrong
financial advisor could cost you much more. If you're not careful, he warns, an
investor can get eaten alive by the very person he or she goes to for help.
Kevin recommends asking a potential advisor, "Are you willing to sign off as a fiduciary?" That, according to Kevin, essentially puts in writing that the advisor will work in your best interest, a higher standard than the more typical "suitable" standard.
Kevin, who has worked as a financial advisor for both Smith Barney and Robert W. Baird handling accounts from $400-$40 million, says he personally has witnessed brokers and advisors who've acted unethically. The result was a fatter return for the advisors and big costs for the investors.
To avoid getting ripped off by an advisor, Kevin suggests asking pointed questions:
In addition, he says run for the hills if there's any mention of a "secret investment tip," the necessity to invest "today" or instructions to "just write the check to me." Kevin currently works in sales, but foresees a day when he will return to the financial industry as an educator.
- How are you paid? (If it's by the insurance company, there may be a conflict of interest).
- Are you paid less if you don't hit a commission target?
- How are you licensed?
- For more information about Kevin Pachucki, see his LinkedIn profile.