Finances can be insanely confusing. When a person feels they are in a financial position to start making investments, the process of finding the right investments becomes a stressful reality check. It can be a blinding reminder as to how easy it is to make poor financial decisions that are damaging to future plans.
If you think that is bad, unfortunately, there’s no big financial wizard that can help people make complex financial decisions on their own.
What makes the stress worse is that when you decide you want to hire someone to help, not every advisor is created equal. Thankfully, there are some easy ways to determine if a financial advisor is the best option and how to find the best advisor that fits your unique needs.
Unfortunately, there’s no big financial wizard that can help people make complex financial decisions on their own. (bummer... I know.)
So, what does a financial advisor do?
A financial advisor helps a person see their full financial picture. This includes investments, insurance, estate, taxes, etc. They will help you see the whole picture to make better planning and investment decisions. They can also help people with debt management and reaching financial goals. They are the strategist that ensures that you are making the best financial moves to better your future.
On average, there are three types of people that are ready for an advisor. One type of person is one that has an idea as to where their financial future is headed, but they don’t want to just settle for less. For this person, allowing a professional to take a look at their finances monthly and suggest new avenues to maximize their investments would be the best option for them. Another type of person, that would be a perfect candidate for a financial advisor, is one that is feeling lost and unsure about what direction is best for them to maximize their financial future. It would be a good idea for them to hire a professional to help ease their mind and answer any questions or concerns they may have. For other personalities, having an impartial third-party helps them makes unbiased decisions that are not impulse or emotion driven.
Depending on which personality type fits where you are, hiring a financial advisor is a great option if you are serious about investment planning and desire to take your financial plan to the next level.
...it’s a good idea for them to hire a professional to help ease you mind and answer any questions or concerns they may have.
How much does a financial advisor cost?
When choosing a financial advisor, it is important to understand what works for your budget and who will give you the most out of the money you are willing to invest. Financial advisors can be expensive for the average individual so it is important that when looking into financial advisors that you understand if the return on investment is worth the cost.
Whether the financial advisor is fee-based or fee-only, it is best to gain a clear picture of their plans, what they offer clients, and if the plans meet your current needs. To make the decision easier, it is highly recommended that you research whether or not the advisor is a Fiduciary.
Why? Glad you asked!
When you have an advisor that is a Fiduciary, they are held to a standard that ensures your interests come first. A broker, for example, is not held to this standard which can lead to a potential conflict of interest or vague assistance. However, if you hired a fee-only advisor, you will have the comfort of knowing they uphold a higher standard for their clients.
Whether the financial advisor is fee-based or fee-only, it is best to gain a clear picture of their plans, what they offer clients, and if the plans meet your current needs.
How to choose the right advisor?
Choosing a financial advisor is a huge decision! When it comes to your financial stability, it’s not worth leaving it up to random search engine results. A recommendation would be to perform a background check on the financial advisor to make sure they don’t have any compliance infractions.
Since advisors can charge an upfront fee plus a monthly retainer, it’s also recommended that when you are looking for the right financial advisor, that you get a consultation (or two!) before making a decision to invest your time, trust, and financial information to a particular firm.
If you are ready to start planning for the future, remove debt or start investing, consider talking to a financial advisor today.
Have suggestions on how to find the perfect financial advisor? Email me! I would love to hear from you.