The Boost: How to choose a financial advisor

This is the second in a multi-part series: for the hundreds of new subscribers, welcome to The Boost, Mezzi's weekly newsletter. Last week, we covered the various types of financial advisors.

A knowledgeable, trustworthy advisor can provide invaluable guidance. However, not all advisors have the same depth of experience and not all of them put your interests first, as this recent Wall Street Journal article pointed out.

🧠 What you need to know

There are over 200,000 financial advisors. They can have various backgrounds, education levels, certifications, and areas of focus. If you're seeking an adviser, start your interview process with these six questions.

Get started with these six questions:

Use these questions to evaluate their background.

  • What are your professional qualifications and certifications? While not a prerequisite to being a great advisor, respected designations like Certified Financial Planner (CFP), Chartered Financial Analyst (CFA), or Certified Public Accountant (CPA) can help in evaluating an advisor’s education level. Some advisors may even hold all of the above, while others may not have a college degree.
  • What is your professional experience? You may find advisors from a wide variety of professional experiences. Some have worked in the tech industry, while others went to medical school. Their professional or educational experience could indicate if they will be able to better suit your needs, particularly if you are working in tech or medicine, respectively.
  • What types of clients do you specialize in serving? Ensure the advisor works with clients in similar situations to yours - whether that's busy professionals, near-retirees, or business owners. They should understand the unique challenges and opportunities you face.
  • How long have you been an advisor? One just starting out may not have experience navigating market cycles. If they started their career in a different industry and then pivoted to being an advisor, they may bring a unique perspective.
  • Do you work with a team, and how will they be involved? Some may work at a firm that can pull in different experts to help with your unique needs over time, while others operate independently and may maintain a network of expert contacts.
  • What are your areas of expertise? Some will have investment management experience, while others will outsource it. Some may get involved in tax optimization to boost investment returns, while others will point you to a CPA.

It’s important to note that you should not stop asking the tough questions after you hire an advisor. You’re building your family’s wealth for the long-term, so it’s important to keep tabs on them.

What's next

In the next issues of The Boost, we’ll dig into how advisors are compensated, how they approach investment management, and all of the services they offer. If there is a question you’d like us to address, reply to this email and let us know!

🤝 How can Mezzi help?

Whether or not you work with an advisor, Mezzi can help make sure your investments are on track to meet your goals. Specifically, use Mezzi to:

  • Maximize tax-saving opportunities across self-managed and advisor-managed accounts
  • Monitor and track performance of self-managed and advisor-managed accounts against key benchmarks
  • Avoid investments that counteract the investment goals of your advisor-managed accounts, or vice-versa
  • Easily share the allocations and holdings in your personally managed accounts with your financial and tax advisors - you can even invite them to collaborate
  • Avoid violations of wash sale rules across personally managed and advisor-managed accounts