Looking for Help in All the Right Places: Choosing a Financial Advisor

30 Sep Looking for Help in All the Right Places: Choosing a Financial Advisor

When it comes to financial planning, women value financial security above everything. Perhaps that’s why they carry less debt than men[1]; they are more cautious and risk-averse. They tend to focus more on the long term – and they can get better returns that way too.

Yet women also lack confidence when it comes to financial matters, so they are also more likely than men to seek help.[2] A financial advisor is clearly the best place to bring money questions, but finding the right advisor can be difficult.

What is a financial advisor?

Put simply, a financial advisor provides guidance on money matters. But there is a wide variety of advisors, and they may focus in different areas and have different backgrounds. Also, because there isn’t a single body governing the industry, many different types of people can be qualified to call themselves financial advisors: stockbrokers, insurance agents, tax preparers, investment managers, estate planners and financial planners.

Yet each of these people provides advice and guidance in a different way. For example, stockbrokers may be interested in buying and selling investments, while tax preparers may put more emphasis on tax planning. Each provides guidance and help, but you need to be careful that it’s the kind of help you want and need.

How do I choose the right one?

With so many different types of advisors, it can be confusing when you try to get started. Yet a little bit of planning goes a long way when it comes to financial decisions. Follow these steps to make a smart choice and choose the right advisor for you:

1. Consider your needs. Think about your family situation and current financial circumstances. Do you have children? Do you have significant debt? What are your financial needs – now and in the future? Don’t forget about your dreams; a cottage or vacation budget is within reach for those who plan.
2. Choose the right services. Decide what you want help with, and focus your search on people who can provide those services. For example, a stockbroker can help you invest in the stock market, while an insurance broker can help you purchase appropriate insurance policies. Some of the most common services include: budgeting help, debt management, investment advice, insurance coverage, tax planning, retirement planning, estate planning and even education planning.
3. Learn about fee structures. There are a number of different ways that advisors charge their clients. Make sure you understand the differences between them. They may be paid through the cost of products, a percentage of assets they manage for you or a fee-for-service model based on hourly or set fees. Fee-only advisors charge a monthly, quarterly or annual fee for their services, while commissions-based advisors earn money based on the number of products they sell or accounts that are opened.
4. Research advisors. Many people go with a referral when they need an advisor, but it’s a good idea to be more thorough than this. Research any recommendations online. Check their qualifications.
5. Interview several candidates. Select a few advisors that seem like a good fit, and make an appointment to meet with them. Get a feel for the way they communicate. If you’re going with your partner, make sure the advisor speaks to you equally. Ask for references and follow up with them. Make sure you have their fee structures in writing, so you can compare with others.
6. Make a choice. Finally, weigh all the options and make your choice. If there was one advisor you really clicked with, the decision may be easy. If not, you may need to meet with a smaller group again. Look for someone you feel comfortable talking with and make sure they have the background your situation requires.

When it comes to choosing the right advisor, do your due diligence. It doesn’t help to get started with the wrong person, only to have to backtrack and start over again, possibly losing money in the process. Do it right: Choose the best person, the first time.

To learn more about achieving financial security, contact us.

[1] https://www.moneycrashers.com/men-women-money-sexes-differ-finances/

[2] https://www.moneycrashers.com/men-women-money-sexes-differ-finances/

Joel Rose

With over 35 years of experience, Joel Rose helps families – and their businesses – to prepare for the future. He offers guidance and support to help his clients create estate plans and succession plans that meet the needs of the whole family. Through his extensive professional and personal experience, Joel is known for his compassion and his ability to find a creative solution to meet each family’s needs.