Introduction
One of the most important decisions an investor can make is who they will turn to for advice. A financial advisor is your main resource when it comes to weighing investment options and making portfolio decisions that suit both your lifestyle and long-term plan. You may know the basics of what’s going on behind the scenes, but when it comes to making decisions on your finances, you want someone who has your best interests at heart. In this article, we’ll take a lesson from those who have been there and done that to make sure you have the tools and know-how to achieve your financial goals.
- Seek education and credentials
A good finance advisor will have a “CFP” or Certified Financial Planner designation. CFP’s are governed by stringent guidelines, which include keeping in touch with the ever-changing financial industry, continuing education and staying up to date with new investment strategies. The CFP will not only stay on top of the current financial market, but also be aware of new laws that are passed and understand how they will affect your personal finances. An advisor with this designation will also be aware of new regulations, products and services that are constantly being developed to help the financial industry advance.
- Choose a fee-only advisor
Fee-only advisors can offer advice in areas such as investment management, retirement planning, insurance and estate planning. A fee-only advisor charges a percentage of your total portfolio as an annual fee (usually 0.25% to 1%).
- Ask yourself if the advisor is “in-house”
“In-house” advisors are financial professionals that work for the organization they represent. These advisors interact with your broker or financial planner and may have access to exclusive market information, which can make them well-suited to make investment suggestions. With this knowledge, they can help you reach your goals faster. The downside is that they are usually not paid as well as a financial advisor who is not “in-house.”
- Check their credentials to ensure their success
Before you hire an advisor, ask for a copy of his or her personal resume. This document should describe the advisor’s education and experience, including how many years of experience they have and their area of expertise.
- Look for experience in your type of business
The best financial advisor to handle your money is the one who has experience with businesses just like yours. While you may be tempted to turn to a big-name firm, your local advisor probably already has contacts in the community and a better understanding of what it takes to run and grow a business similar to yours.
- Get referrals from people you trust
Ask friends, colleagues, or your trusted attorney if they have a financial advisor they can recommend. When you are offered this type of recommendation, don’t hesitate to contact the advisor immediately and give them a call. Your current financial situation is extremely important when choosing an advisor, so take your time in finding the right one.
Conclusion
What you invest in and how you invest are as important as whether or not you invest in the first place. While choosing the right advisor can be a complex task, it is essential to your financial future. With the advice outlined above, you should be able to find the advisor who will help you stay on track toward your financial goals and offer sound advice on how to meet them. Just remember: Choose an advisor who’s “in-house” at your job and make sure that he or she has a proven track record of managing money successfully.