Financial planning helps you be in control of your income and investments and reach your long-term financial goals. While it’s possible to do this on your own, it can become complicated and overwhelming as time goes by. So, hiring an expert is most beneficial. Aside from saving you time and effort, it will also ensure professional advice on handling your wealth.
Financial experts have various ways of getting paid and offer different services–from managing your estate to comprehensive financial planning. So, it’s crucial to find one that will best fit your needs. Here are some tips to help you:
1. Find Out What Financial Services You Need
Before talking to an expert, you must first figure out what kind of financial advice and assistance you need. Are you planning your retirement and want help managing your assets, or do you want to invest but don’t know where to start? Once you have a clear idea, you can use it as a guide to narrow down your options in choosing a suitable financial advisor.
While all advisors can guide you in making financial decisions, their services may still vary. Some of these include financial planning, tax management, retirement and estate planning, investing, budgeting, and debt management.
2. Choose the Right Kind of Financial Advisor
It’s crucial to choose an advisor who has the knowledge and expertise about your specific financial needs. For instance, if you need help with insurance coverage, hire someone who knows their way around various insurance policies to ensure you get the most suitable option. Some of the most common types of advisors include investment advisors, certified financial planners, and wealth advisors.
3. Consider a Fiduciary Financial Advisor
Aside from the specializations of each financial advisor, another factor to look into when choosing one is whether they’re a fiduciary. An advisor with a fiduciary duty must work in the client’s best interest rather than their own. If you work with a financial advisor who isn’t one, they might recommend products or give advice that won’t benefit you and will only earn them more commission.
For some services, like budgeting help, a fiduciary financial advisor may not be that necessary. Still, hiring someone with a fiduciary standard of care may be the best course of action. Aside from ensuring sound financial guidance, knowing they focus on your best interest will help keep your mind at ease.
4. Determine How Much You Can Pay
The cost of financial advisors varies, so it’s important to consider how much you’re willing to spend before hiring one. In determining your budget, you must also factor in your total assets and the level of guidance you need. For instance, if your portfolio doesn’t call for comprehensive financial planning, you can opt for a more budget-friendly option like the robo-advisor.
There are various payment schemes available that will suit almost every budget. Some of these include assets under management, commission-based payment, and hourly, flat annual, and per-plan fees.
5. Do a Background Check on Potential Advisors
One of the most important things to do is to vet your financial advisor’s background. Doing so will not only ensure their offers are exactly what you’re looking for but also guarantee that you’ll be working with someone trustworthy and certified.
Besides researching your advisor’s credentials, you may verify if they have received complaints or have disciplinary problems through BrokerCheck by the Financial Industry Regulatory Authority (FINRA). You can also ask them questions that will bring more clarity to their services, such as:
- Are you a fiduciary?
- Do you always uphold your fiduciary duties?
- How often will we be communicating with each other?
- What kind of clients do you typically work with?
- How do you get paid?
The Bottom Line
Proper planning and management of your wealth are crucial in achieving your long-term financial goals. So, if you are unfamiliar with how to navigate your assets and investments or want more help in making crucial financial decisions, don’t hesitate to reach out to a professional.
Choosing the right financial advisor is also not a walk in the park. But with these tips, you can make more informed decisions and find an expert you can rely on who will help you reach your goals.