Use caution when choosing a financial adviser

As a busy professional and/or business owner, you have heavy demands on your time.

I'm not going to suggest that using a financial adviser is a poor decision. However, I am suggesting that you must exercise a great deal of caution if you decide to look to someone else to make important financial decisions for you.

This doesn't necessarily mean that you'll get bad advice in such an arrangement. However, it does mean that you are in a risky situation calling for constant vigilance on your part - a built-in conflict of interest that puts human nature to a rugged test.

Check for certification

For most investors who feel the need for financial guidance, a better choice is a certified financial planner.

Professional financial planners have no incentive to get you to do a lot of buying and selling. They charge an annual fee based on the size of your investment portfolio, typically 1 percent to 1.5 percent. For that flat fee, their job is simply to manage your investments in a way that will bring you the best possible return.

Even this arrangement does not guarantee better performance than you could do on your own. Presumably, a full-time financial professional will make sound investment decisions. Still, that charge of up to 1.5 percent, especially if the planner is putting all or most of your money into mutual funds, which have an annual fee of their own, could cause your investing costs to eat up much of a good return.

You can get more information about certified financial planners at http://www.financialplannernetwork.com/.

These are a few of the reasons why I believe most investors are better advised to take the time to learn the basics of financial management so that they can make their own financial decisions. While you may never achieve the level of knowledge of a full-time professional, no one is going to be as concerned about your money as you are. With a little effort, you can be your own best financial adviser.

However, if you still feel the need to look to someone else to help with your investments, you should be aware of some of the signs that the advice you're getting is not in your best interests.