When considering hiring a financial advisor, you may weigh several pros and cons and ask yourself several questions: What services does a financial advisor provide? What is it like being a client of a wealth management firm? Is this the right choice for me?
Is hiring a financial advisor right for you?
While working with a financial advisor may not be suitable for everyone, many people benefit from working with a professional to help them manage their financial life. Families and individuals may benefit if they seek comprehensive financial planning services, look to be strategic about their retirement planning, face a life changing transition (such as a divorce), want to diversify their investment portfolios or be tax-efficient about their investing. Business owners may benefit if they seek to create a cost-effective retirement plan for their company, if they’re buying or selling a business, or looking for tax efficiency in their business.
Things to consider when deciding to hire a financial advisor
A good financial advisor will not only invest your money but will also consider factors to create a custom plan tailored to fit your needs. While different financial planning firms have various levels of capabilities, there are a few things you should look out for when choosing a financial advisor.
1. What services does my financial advisor offer?
In addition to investment management, you may want to consider hiring a financial advisor that also provides retirement planning, estate planning, business planning, tax planning, education planning, insurance planning, and more. Your advisor should be able to create a custom plan with your financial goals in mind. This plan may include cash-flow projections from now through the rest of your life. They should be able to model scenarios for you – for example, what would happen to your retirement if you decided to buy a summer home in the Florida Keys? They should be able to analyze the tax impact of your investments and financial decisions to ensure that you are minimizing your tax bill every year.
2. Is my financial advisor’s team skilled in these service areas?
You want to look for a team that includes Certified Financial Planners (CFP®), Certified Public Accountants (CPA), and Chartered Financial Analysts (CFA®). In addition, if you have even more specific needs, you may be interested in a team that has a Certified Divorce Financial Analyst (CDFA®), an Accredited Investment Fiduciary (AIF®), and a Qualified 401(k) Administrator (QKA®). These designations take a financial professional beyond simply being a “financial advisor.” They require an advisor to complete additional education and stringent testing to offer the best quality advice to their clients.
3. What is it like to be my financial advisor’s client?
The relationship between you and your financial advisor should not be transactional; your relationship should be deeply personal. Your financial advisor is someone you’ve entrusted with not just your money, but also your goals, fears, and dreams. Your advisor should aim to provide their service with the utmost care. In addition to providing their services, your advisor should communicate with you regularly and be conveniently available. They may go the extra mile and provide education, seminars, events to show their appreciation, and more.
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Hiring an advisor may be the next step in your investing journey. Feel free to call or drop us a message in the box below! We’d be happy to answer any of your questions.
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