Like most people, perhaps you’ve wondered whether you need professional assistance from a financial advisor.
And, like many others, you’re not very sure about what financial advisors really do, and you don’t know whether they charge high fees for their services, you wonder are they trustworthy and will they help me to make the right decisions?
It’s important to get the right information to answer all these concerns before you hire a financial advisor, otherwise you could end up regretting the decision you made.
If you’re looking for a top quality financial advisor San Jose make sure that you get it right the first time.
How To Tell Whether You Need A Financial Advisor Or Not
Everyone who has issues with money management may not need the services of a financial advisor. If the sums are smaller and easy to control, with some research, regular monitoring and timely actions, many people can manage their own money quite well.
However, this means that you must have the time, commitment, knowledge and skills to do it yourself. DIY also means a certain amount of effort, patience and access to information that will help you make the right decisions.
Another huge component in financial management is how much interest you have on the subject. Unless you truly enjoy all aspects of managing money, research, making investments, watching the stock market, etc., the process can become a chore and a pain. If you’d rather be doing something else with your time, a financial advisor is your best bet.
Studies show that more than 90% American adults felt happier and more confident when their finances are in order. Yet, paradoxically, just 17% report using a financial advisor, while more than 75% say that they manage their own finances.
This is in spite of the fact that more than 50% of Americans may not be able to meet a sudden, $1000 expense. Money mistakes and misjudgments have cost Americans more than $1200 annually on average, yet people continue to rely on guesstimates of how much they need/want and what their financial goals are.
You need a financial advisor if:
- You need advice and specific financial information
- You feel confused and overwhelmed by financial planning
- You’re not sure about what to do with a sudden inheritance, windfall or your retirement funds
- You need advice on how to manage/pay off your debts
- You don’t know how much insurance you need for yourself and your family
- You need help with estate planning
- You want assistance with planning large investments such as buying property, planning your children’s future, etc.
- You don’t know how to manage multiple financial goals
- You seem to have no clear financial strategy, but are winging it every time a decision point comes up
- Your finances are in a state of disarray and you need to consolidate
- You feel overwhelmed by your spending habits and want to know where you stand
- You have financial concerns that follow life changes such as divorce, marriage, birth of children, death, moving, illness/disability, job-loss or change, buying/selling property, etc.
Easy Steps To Find The Best Financial Advisor in San Jose, CA
- Know What Type of Advisor You Need/Want: Though there are more than 12,000 registered investment advisors working in the US, it’s a fact that there are several different types of professionals in this sector. They may be commission-based, fees-based or fees-only. Commission-based advisors would sell products/services such as mutual funds, insurance, annuities, etc. and are usually agents of certain financial companies. Their advice could be skewed in favor of the products they represent. Fees-based advisors collect a commission, but they also charge the client a fee. Fees-only financial advisors have a fiduciary duty to act in favor of their clients and are usually the most preferred. They may also charge a flat fee for a package of services, or a per-plan fee.
- Evaluate what help you require: You may require regular advice, comprehensive planning for the year, hourly advice or a one-off consultation, or you may need help with a particular section such as asset management or retirement planning. Retirement planning specialists, wealth planners, high net worth planners, estate planners, divorce financial analysts, financial transitionists, exit planners, special needs consultants, etc. are some of the specialists in this field. In some cases, a robo-advisor can give you routine assistance.
- Get referrals and recommendations: Word-of-mouth recommendations and referrals from trustworthy sources are the best. Since this is a field where reputation and integrity play a vital role, if your financial advisor comes highly recommended by people who are satisfied with their services, you don’t have much to worry about. Advisors also guard their reputation carefully because this is their bread and butter.
- Find them also on: Reliable and well-established sources such as the National Association of Personal Financial Advisors, the nearest CPF website to your location, the Financial Planning Association, National Association of Insurance and Financial Advisors, Society of Financial Service Professionals etc. can also be tapped for recommendations and referrals.
- Determine your own budget: Decide how much you can afford to pay out in terms of fees and balance it out against the return on investment. If you’re working with a commission-based agent, they may not charge you high fees because they get compensated by their sales of financial products.
- Confirm credentials and qualifications: There are several reliable resources where you can check your financial advisor’s qualifications and credentials independently. Check that their credentials and qualifications are current. These websites can also tell whether the person has faced disciplinary proceedings. Interview and talk to multiple advisors before you sign on the dotted line.
- Ensure that they will put your financial interests first: While new federal rules do protect investors, it’s still important to make sure that your financial advisor will work with your interests in mind. Be wary of advisors who make tall claims and promise to provide market-beating strategies to grow your money. Ethical professionals don’t make such claims or give such guarantees. Trust your instinct and make sure that you’re comfortable with the person because this must be a long-term relationship that you’re entering into.