Many people make the mistake of believing only the wealthy need a financial advisor, but this couldn’t be further from the truth. Financial advisors help you better understand your finances and put strategies in place to help protect them for years to come. Choosing the right financial advisor may be able to positively impact your and your family’s financial stability. The process of selecting the right professional should be both disciplined and methodical. This article goes over the important steps and considerations when hiring a financial advisor Denver.
Have An Understanding Of The Types Of Financial Advisors
There are different types of financial advisors. Some professionals offer investment management services, while others are limited to financial planning services. Some other financial advisors are experienced in retirement planning, while others are experienced in wealth accumulation for young adults whose goal is to retire after working for one or two decades. All of these areas aren’t the same. You need a financial advisor that is experienced in the specific area of your interest, whether retirement planning, investment management, wealth accumulation, or others.
To improve the chances of selecting the right one for you, you need to know what these services are and how they affect you.
Financial Planning – This area addresses all aspects of your financial life, including your income, how much to save, what to spend, the type of insurance you need to maintain financial stability, and more. It touches on all areas except for your investments.
Investment Management or Advisory Services – This handles all areas of your investment and shows you new investment opportunities based on your appetite for risk.
Retirement Income Planning – This is long-term and focuses on aligning your finances with your retirement goals. This advisory service deals mainly with your taxes, investments, social security, pension, and more.
Reputable Credentials Are Important
Hiring a financial advisor can significantly affect your finances. When selecting from the pool of options, you should consider the advisor or advisory firm’s credentials. Like hiring an accountant, lawyer, or any other professional, make sure that your advisor meets and exceeds the industry standards. Some of the common designations advisors may have include CERTIFIED FINANCIAL PLANNER™( CFP®), Personal Financial Specialist (PFS), Chartered Financial Analyst (CFA), and others. These designations can help show that your financial advisor has invested in themselves.
In addition to designations, you can also check whether your financial advisor belongs to any reputable associations. Some associations have a high entry barrier, and membership can also show that your financial advisor has invested in themselves.
Fees And Compensations
In any business relationship, fees and compensations are important. There are many ways by which financial advisors charge for the services rendered. Some charge a flat fee for their services, while some may demand a certain percentage as compensation. When making a hiring choice, ask about the fees and compensation and consider how fair they are. If the financial advisor is charging an asset-based fee, participating commission, or an hourly fee, consider these and compare with the value-added.
You should also understand the difference between a fee-only and a non-fee-only advisor. The latter may receive compensation and other revenues in addition to the fee charged, while the former charges a flat rate for the services rendered.
Screen Potential Hires Using Search Engine
The internet has made searching for professionals a lot easier. Carry out a simple search for financial advisors in your local area to get started. Use the internet to search for reviews and in-depth information about each potential hire and thin the list as appropriate. Doing this will save you the stress, time, and energy that would otherwise have gone into hopping from one financial advisor’s office to another.
Ask Questions Before Making A Decision
When interviewing potential financial advisors, you need to define what you want clearly and certify that the professional can deliver. Asking the important and hard questions will help you determine who the right fit is. Some of the important questions to ask include;
- What type of financial advisory services do you offer?
- What kind of clients do you work with and why?
- What is your approach to communication? How often will I hear from you? What is your preferred mode of communication?
- How much does your service cost?
You can also prepare other questions that help you to establish confidence in your hiring decision. Once you’ve met a professional who has aced all of your tests and ticked all boxes, you can go ahead to make the hiring decision.
E.A. Buck Financial Services is an independent financial services firm helping individuals create retirement strategies using a variety of investment and insurance products to custom suit their needs and objectives.
Investing involves risk, including the potential loss of principal. Neither the firm nor its agents or representatives may give tax or legal advice. Individuals should consult with a qualified professional for guidance before making any purchasing decisions.
Securities offered only by duly registered individuals through Madison Avenue Securities, LLC (MAS), member FINRA/SIPC. Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM), a Registered Investment Adviser. MAS and E.A. Buck Financial Services are not affiliated entities. AEWM and E.A. Buck Financial Services are not affiliated entities.