Hiring a Financial Advisor can be one of the best moves you can make as an investor. A good financial advisor will take into consideration where you currently stand financially (Assets, liabilities) and where you intend to go (Goals). These aren’t stock-picking masterminds who are leaving you to your own devices, but these are people who know how to effectively analyze the markets in order to give you the information you’ll need to make the right moves. They also have years of experience in helping individuals create a solid investment portfolio so that you won’t just be taking money out but making it grow.
So if you’re looking to hire a financial advisor for your own finances, what do you look for? Well, the most important qualification for an advisor is education. You want someone who holds a graduate degree or at the very least, holds a bachelor’s degree in finance, which can be obtained online and covers a large amount of material. An advisor who holds just a bachelor’s degree can really only serve to make your life more complicated, rather than simpler. In addition, many financial advisors offer a free initial meeting to discuss your goals and how you’d like your finances to pan out. If he or she does not offer this, move on.
Another important criteria to look at is experience. This is especially true of fee-based advisors. The larger the amount of experience the advisor has with high net worth clients, the more likely he/she will be able to get you the best deals on investments and/or products. Also, it’s important to realize that there are two types of advisors: those that charge a fixed rate and those that charge a variable. Fee-based advisors generally tend to have lower costs since the client doesn’t have to pay a large amount of money up front.
Once you’ve found an advisor with the above qualifications, it’s time to consider what you’d like in terms of compensation. Of course, you’re looking for a solid financial advisor who will get you the highest quality trades at the most affordable costs. There are also other factors that come into play as well. For example, it’s common for a financial advisor to be required to either work with one or multiple brokerage firms. This may not be of value to you. Again, it’s up to you and your financial situation.
Lastly, it’s important to feel comfortable with your financial situation as it relates to your advisor. Although ideally, you’d already have a relationship, you want to establish an initial rapport. That way, you’ll know that he/she truly is concerned about your financial situation. If you feel uneasy about the financial advisor you hire, it’s important to feel comfortable that your advisor can make good decisions for you – based on your goals, needs, etc.
As you can see, it takes more than simply hiring an advisor to help you manage your finances to achieve wealth management success. If you feel completely overwhelmed and don’t know where to turn, there are many resources to help you. In particular, you may wish to consider using behavioral coaching to help you develop a thorough and specific action plan to achieve your goals. Look for good financial advisors with sound behavioral coaching credentials and, of course, an excellent background in finance.
