As someone who is looking to improve their financial standing, hiring a financial advisor can be an excellent way to get yourself on track. The key is to find the right financial advisor to meet your needs, which can take some research and due diligence. To help you through the process, here are some things to look for when finding a financial advisor.
1. Fiduciary standard
A financial advisor who works to the fiduciary standard has a legal obligation to act in their clients’ best interest. This means they are required to provide advice that is appropriate for the client’s situation and not influenced by potential conflicts of interest. Ask your prospective financial advisor if they are a fiduciary and get a clear answer before signing any documents.
2. Credentials
Not all financial advisors are the same, and so it is important to check their credentials before entrusting them with your finances. Look for advisors who are certified and accredited by reputable organizations such as the Certified Financial Planner Board of Standards, the National Association of Personal Financial Advisors, or the Financial Planning Association.
3. Experience
While younger financial advisors may have the training, they may not have the experience that comes from working with clients over the years. On the other hand, an experienced financial advisor may have a better understanding of the nuances of trading, handling client requests, and managing complex portfolios. Look for advisors who have years of experience behind them, preferably 15-20 years or more.
4. Availability
Make sure to clarify how available your advisor will be for communication and meetings. This can vary quite a bit between advisors – some may only be available over the phone or email, while others will be happy to schedule face-to-face meetings when necessary. It is important to find an advisor whose communication style matches your expectations.
5. Investment strategy
Different advisors may recommend different investment strategies, so you’ll want to make sure your prospective advisor can provide a strategy that aligns with your financial goals. Ask about their investment philosophy and any strategies or tactics they recommend. Ensure you understand what level of risk you’re willing to take on as well as what return on investment you expect.
6. Fees
Many financial advisors work on a commission basis, earning a percentage of the assets managed. Others may charge flat fees, based on portfolio size, or an hourly rate. It is also essential to clarify upfront what the fees will be, how often they will review plans over time, and how long those fees will remain in place.
When you work with the right financial advisor, they can help you streamline your strategies, build your finances, and increase your overall wealth. However, you also need to make sure that you are comfortable with them before you start working together. Consider these six factors when choosing a financial advisor to ensure that you have a solid foundation to build your financial future.
