It is no secret that we truly believe the best place to buy a variable annuity is through an independent broker. We feel this way because independents are not restricted to an “approved” list of companies to deal with.

No matter how you cut it, banks, brokerages and captive agents (i.e. Northwest Mutual, American Express, etc.) can only deal with certain companies. They limit the broker’s choice of products based on their own criteria, or by how much a company is willing to pay to be on their preferred or “approved” list.

Independents may have a preferred list, but they can, in theory, choose any product that is right for the client. This model is the direction that all investment companies should follow. Give the brokers a choice on what product they can sell, not what product you think is the best, especially if it is based on marketing dollars.

So how do you choose a financial advisor that is right for you? This is a terribly personal question and difficult for us to answer. Again, we will give you some broad guidelines on how to choose an advisor.

Most importantly, make sure you are mentally compatible with the advisor. If you do not like each other, there will be problems down the road. Just being compatible is part of the equation, not all of it.

Make sure they are competent, this is as important as liking them personally. We know several brokers who are great relationship people, but terrible advisors. If they only sell one product to everyone, they are not good advisors. One product does not fit everyone’s needs and to think that way is insanity. Competency is easy to spot, believe it or not. A good broker should build a relationship with you, ask you questions and take notes. Remember you are not looking for a salesman here, you want an advisor. A salesman will push you, don’t be pushed.

Do they speak your language? If the broker talks above your head with plenty of industry lingo that you do not understand, he is wasting your time. Industry jargon is just that -industry jargon, and if you do not understand, it means nothing to you unless the jargon can be translated to everyday English. Communication is critical when working with an advisor, and if you two are on different pages, there will be problems down the road.

Experience does count. We know there are many good young people entering this field, but we really believe in experience. Someone should have experience under their belt, a good minimum, in our book, is 5 years of industry experience. This is a good rule of thumb, because many broker trainees burn out or fail in the first couple of years. I would say 10 years experience is optimal. After 10 years, 98% of all brokers have washed out of the business and the 2% left are the good ones, usually, but not always.

Can they hear you? If the advisor is more interested in talking about themselves than your needs, walk away. The advice you are about to receive will benefit them more than you. We understand the need to pet your own ego, but this is your money and the advisor should be more interested in you than than hearing their own voice.

Is this your full time job? Hey, this is a tough industry, that is no secret, but do not work with someone who does financial services on the side. That makes as much sense as us giving you medical advice on this site. There are several firms that deal with this kind of part time advisor, and I think there should be a stop to this, as this is your money we are talking about. Usually these people work only at night, so they are easier to spot.

Use the NASD website to check the background of an advisor. This is a free tool and easy to use. Simply input their name and firm they are associated with, and you will receive a report by email. It is anonymous and fast, and when you pull up their name if there is a “maybe” file on the left hand side under complaints, then they have a complaint.

If your broker has a single or even a couple complaints, it is not the end of the world and you should not do business with them based on that alone. The warning signs are if these complaints are recent and close together, if there is more than one, or if they are relating to the same type of complaint, i.e. unauthorized trading. You are looking to see if there is a pattern or potential for a future problem. One or two isolated complaints are nothing to be extremely worried about.

You are interviewing each other. The advisor is wondering if they want to work with you and you are deciding if the advisor should work for you. We know several brokers who turn potential clients away because they did not think they were compatible, and there is nothing wrong with that. At the end of the day, if you are not right for each other, it will end badly. This is why you need to interview each other and make sure you can work together without any problems.