Choosing the Right Financial Advisor
There are several considerations when it comes to deciding whether or not you should work with a financial advisor.
I fully understand how intimidating it can be, as we are talking about entrusting the management of your life savings to another person or company!
Common Concerns About Hiring a Financial Advisor
It’s uncomfortable. Talking about our finances can be challenging. We might be embarrassed of the mistakes we have made, like carrying credit card debt or taking money out of a retirement account prematurely. We also may not have much saved which makes it difficult to share with another person.
I don’t want to be taken advantage of. There have been horror stories from the financial services industry, so it makes sense if this is an area of concern for you. Just like hiring a mechanic to fix your vehicle for a fair price, you want to ensure that you aren’t being overcharged for the services being provided to you. Since advice is intangible, you can’t hold it or “feel” it, it can be challenging to filter good advice from bad advice.
Since these are all fair concerns, it’s important we are diligent in selecting the right financial advisor who truly has your best interests at heart.
When Do I Need to Work With a Financial Advisor?
I don’t even know where to start. A good financial advisor will help you identify and figure out how to help you achieve your financial goals. They will provide you with an objective opinion about your financial situation. They will ensure that your investments and protection strategies are tailored to you. If you want regular check ins and updates to your financial plans as “life happens,” then working with a financial advisor may be a prudent decision for you.
I have a complex situation. Life is complicated, and we all have a different financial story. Family dynamics can greatly impact your financial plan. Whether you are single, married, or divorced, each can add varying complexity. If you have a sizeable amount of assets, there are certain tax and estate considerations as well.
How Do I Choose the Right Person?
I have so many options. There are over 300,000 financial advisors in the United States. We want to ensure that we partner with a person who shares similar values as us and that we enjoy working with. Try asking friends if they have any recommendations on which advisors you could reach out to.
I have scheduled a meeting with a financial advisor, now what? Remember, you are not committed to working with this person yet, so try to have the mindset of an interviewer. Do you like them? Could you see yourself working with them? Below are a few other important questions to ask.
How are you paid?
Why did you get into the business?
What are your credentials and experience?
What differentiates you from other advisors?
Final Thoughts
Regardless of whether or not you decide to work with a financial advisor, I hope this helps you on your journey to financial success!
