A financial advisor will help you make the right decisions regarding your present and future financial condition. You do, however, need to make sure you have the right person doing the advising or they can lead you in the wrong direction and cause you to lose everything.
It is a fact that most people will need the help of a financial expert at some point in their life. You will need their assistance with retirement plans, finances, investments, insurance, estate planning, or your income taxes.
When you use a financial advisor, they are able to guide you through all of the rules, regulations, and the complicated federal and state laws. It is through their recommendations that you are able to make your plans more solid. You know that you are on the right track when your advisor tells you so and advises you on how to keep everything going in the right direction.
Even a person who is not on the right track can benefit from what a financial advisor has to offer. As a matter of fact, these individuals can go from being “down and out” to landing on their feet and establishing a stable financial future.
Choosing the right financial advisor
The financial services industry is offering more and more services to individuals. Rather than just providing advice, the service range is much broader. This means the first thing you need to know when looking for advice is what service you want to take advantage of. Financial advisors come in different forms. They come as investment advisors, financial consultants, investment consultants, or another title suggesting the same. No matter their title, they all state that they offer the best financial services available.
It is up to you to find out whether or not the claims that they offer the best financial services are true or not. Here are the steps you need to take to find the best financial advisor for you:
Compile a list of advisors you want to check out. You can check your local telephone book or do a search online. You can also locate financial advisors through an Internet search.
Make an appointment with each company you are interested in. This hour of consultation may be free or it could cost you up to $150 or more. The time should be spent with you telling the financial advisor what you want. Be sure to be prepared by having your net worth, a statement of your income, and what your goals are. Preparation can keep you from having to pay out a large sum of money for the advisor’s time.
Confirm what the financial advisor’s fees are. Ask how they are paid, how much they charge, etc. Those such as tax advisors and estate planners may request to be paid by the hour, while others may be paid through commissions they earn when facilitating stock trades.
You should always request an “ADV form.” Each financial advisor that is legitimate and manages over $25 million in investment assets reports their methodology, education, compensation, and business background to the Securities and Exchange Commission. This form allows you to obtain that information. Those that manage less than $25 million in investment assets disclose the same information to the securities agency within their state.
If the financial advisor sells securities, they should have a Central Registration Depository, or CRD, on file with the state securities agency.
During your appointment look for any diplomas or other credentials on the advisor’s wall. If you do see such documentation, look at what the initials after their name say. You want to see ChFP for Chartered Financial Consultant, CFP for Certified Financial Planner, PFS for Personal Financial Specialist, or CPA for Certified Public Accountant.
Unfortunately, most states do not have a licensing requirement, so almost anyone can call themselves a financial planner. This is why you want to rely upon credentials. Experience is also important because the longer, the better. You can ask for sample work, names of clients, and ask how long the financial advisor has been in the field and done business in the area.
If you have friends who have used a financial planner in the past or present, ask them about their experiences. Be sure to find out anything you can regarding how they charge, if they are trustworthy, if they have the proper credentials, etc. Word of mouth is very powerful. Keep in mind, however, that you need to make your own determination because your idea of a good financial advisor may not be the same as your friend of family member’s.
Using the above tips can help you to find the financial advisor that is right for you and your particular financial situation. Here are just a few more tips to help you choose a financial advisor that is the right fit:
You may want to choose an advisor that does specialize in different areas if you want to experiment with different ways to make your money work for you. For instance, you need to be advised on how to save money, but you may also want to do some investing so that you can make your money grow. Having your services in one place can help you to save money rather than having different types of financial managers with their hands in your finances.
Once you have the right financial advisor in place, you can rest assured that you will have a much better financial future than you would have otherwise. You only live once, so you want to make sure you live it right and as comfortable as you can.