Buy and hold is dead. Whether you’re purchasing equities in one company or selecting a mutual fund, the rules of successful investing have changed. Craig Wear, a registered investment advisor, says success in these turbulent economic times follows new rules. “Active markets require active management,” he said on the Homework Houston radio show.

Before you pick an advisor to help you manage your investments, do your homework. Craig Wear warns that just having an advisor doesn’t guarantee success. He offers 4 steps that will help you pick an advisor that will work in your best interest.

“Figure out how that person is compensated,” Wear said. There are two basic ways financial planners make money. The majority of advisors work for insurance companies or are self employed working as a representative or advisor with a brokerage firm. “They are compensated by a transaction,” says Wear. “And, you need to understand that.” The other choice is a fee based advisor. Craig Wear is a fee-based advisor. “We have a different standard that we adhere to,” said Wear. “Because they are a registered investment advisor, they are held to a standard of a fiduciary in the way that they offer information. They always have to make recommendations to you that are in your best interest that do not have a conflict of interest on their part.” Wear says commissions serve as a built-in conflict.

Ask about the prospective advisors’ credentials. Craig Wear says that the two most widely accepted professional designations are “Certified Financial Planner” and “Chartered Financial Consultant.” There are many more designations and certifications but Wear says these two focus on the financial planning relationship.

Look for experience but not just years in business. “Dig a little deeper,” said Craig Wear. Ask more questions. “Tell me what you’ve been doing. Talk to me about your systems. Talk to me about your game plan. About what you do with me when I am your client,” Wear suggested. Determine if that advisor will be working specifically for you or plugging you into their existing system.

Finally, Craig Wear suggests using your instincts. “This is a relationship that will last a long time,” said Wear. He suggests selecting an advisor that you feel comfortable with and that is easy for you to work with.

The Craig Wear Financial Group is an independent financial planning and investment management firm, as well as advisor representatives of a Registered Investment Advisor, Game Plan Advisors, Inc.

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Web link:
www.craigwear.com