When it comes to your money, many people take a DIY approach and attempt to manage their investments without hiring a financial agent. However, working directly with your portfolio isn’t the same as working with a financial agent who specializes in providing advice and services related to personal finance.
Financial advisors offer value in many ways, which is why more than 70% of high-net-worth individuals hire an advisor. If you’re thinking about hiring financial advisors or are looking to switch advisors, read on for some helpful insights.
What To Look For In A Financial Advisor
Ask yourself a few key questions when looking for financial advisors. These questions will help you understand if a financial agent is a good fit for you and your situation.
Experience – How long has the advisor been in business? Are they a generalist or a specialist? You can work with a generalist, who will be able to advise you on many topics relating to your finances.
Specializations – What are the advisor’s specializations? Is the advisor certified and/or licensed in any areas? These are good questions to ask any financial advisor. If you have a particular need or issue to address, it’s best to work with an advisor who has experience and expertise in the relevant topic(s).
Services and experience – What services does the advisor offer? What experience does the advisor have in providing these services? What do you need help with? Some advisors specialize in helping individuals with retirement planning, whereas others focus on college savings for your kids.
How To Find A Financial Advisor
First, decide if you need an advisor. Many people don’t. Then, decide how and where to find a financial agent. Here are a few suggestions.
Networking – One of the best ways to find a financial agent is through networking. Identify your current and former colleagues, clients, friends, and other people you know who have worked with financial advisors. Then, set up a time to discuss your needs and find out who they recommend.
Referrals – Another way to find a financial agent is to ask for referrals from trusted sources. Most financial advisors are more than happy to provide you with a list of references. And, if you have friends or colleagues who have worked with a financial agent, ask them for recommendations.
Types Of Financial Advisors
Here are a few types of financial advisors you may come across when searching for a financial agent.
Broker – Brokers sell investments, such as stocks and mutual funds, which means they are salespeople. While brokers can provide some advice, they are not fiduciaries.
Registered Investment Advisor (RIA) – RIAs typically offer investment advice and manage your portfolio. RIAs are fiduciaries and are held to a fiduciary standard.
Financial Planner – Financial planners typically don’t manage your money. Instead, they provide advice and recommendations on how to manage your money.
The Bottom Line
When you choose a financial agent, you need to make sure you find the right match for your needs. You may want to work with a financial agent who is a certified fiduciary, so you can be sure that his or her advice is in your best interest.
You also may want to work with a financial agent who specializes in a particular area of personal finance. When choosing a financial agent, make sure you ask a lot of questions. You want to make sure you find the right advisor and investment strategy for your situation.