The Art of Choosing the Right Financial Advisor

Here are some questions you must ask to a financial advisor to understand whether he scores well on the above two requirements:

* Why are you in this business?
* Do you believe in the short term, and do you use market timing? (A 'yes' response to either of the last two questions is a 'no' signal to you.)
* Do you focus solely on asset management, or do you also advise on taxes, retirement planning, debt management, and insurance?
* How do your education and experience qualify you to give advice in those areas?
* How do you choose investments? What investing approach do you believe is most successful?
* What's your interest in recommending this investment to me?
* Have you bought this investment in your personal account? If not, why are you recommending it to me?
* Can you offer some proof of your investing success for your clients?
* What do you do when an investment performs poorly for an entire year? (Any advisor who answers 'Sell' is not worth hiring.)
* Do you, when recommending investments, accept any compensation from any third party? If yes, under which circumstances?
* Do you consider yourself financially successful? Why? How do you define financial success?
* How high an average annual return do you think is feasible on my investments? (Anything more than 10-15% is unrealistic.)
* Will you provide me with your resume, and at least three references?