7 Easy Steps to Help You Find the Best Financial Planner

Hiring a financial advisor for your family isn’t something most people consider. In fact, most Americans aren’t confident in their understanding of a typical 401K.

But having a financial advisor is beneficial, even for those in the middle class. They set up a blueprint or strategy to help you maintain your finances and build wealth.

Homeownership, saving for college, retirement, or starting a business, can all be discussed with your financial planner.

Looking for a financial advisor doesn’t have to be difficult! If you know where to start, you can find one that fits the needs of your family or situation.

Let’s take a quick look at 7 steps to finding the best financial planner.

1. Which Planner Do You Need?

There are two different types of financial planners: robo-advisors and human advisors.

Robo-advisors are automated, online service options with a low-cost fee. They’re great if you’re dipping your toe in the water of financial advice. You can often get started right away with no deposit or a minimal one.

Some have human advisors to speak to if you need help.

Human advisors are, well, human! Financial planners work in different areas of expertise, like wealth management, retirement, investments, or general planning services. Some can specialize in more than one service at once.

Assessing your situation can help you narrow down exactly which financial planner to choose.

2. Design a List of Questions

Once you know what you’re looking for in a financial planner, start by compiling a list of questions. Take these questions with you to an interview to see if you’re compatible. You will be in touch often with your advisor, so make sure you work well together!

Questions will vary according to each situation, but here are a few to get you started.

What Type of Client Do You Prefer?

This sounds harsh, but it can weed out any planners who may not understand your needs. If the planner’s ideal client matches your situation, you can feel more confident that they’ll lead you in the right direction.

How Long Have You Been in Practice?

It’s advisable that your financial planner has four years minimum in the field. Also, inquire about other areas in finance they’ve practiced or may be interested in.

How Often Will We Communicate?

Meeting with your financial advisor will vary based on the services you need or may need. Understanding their methods and frequency of communication can be helpful.

May I See a Sample of a Plan?

They cannot show you any client records. But financial planners should be able to produce a sample of their work or present how they would configure a plan for you.

3. Ask for Credentials

There are three criteria you want to see in a financial planner’s title:

  • CFP, which stands for Certified Financial Planner
  • CFA, which stands for Chartered Financial Analyst
  • PFS, which stands for Personal Financial Specialist

True financial advisors get their training and certificates in different ways. They all must pass an examination, follow a code of ethics, and be adamant in continuing their education.

4. Check for Complaints

Anyone can appear to be an expert, but it’s advisable to check their legitimacy once you’ve found a potential financial planner. Checking with Financial Industry Regulatory Authority or other organization is the best way to find complaints.

No financial planner’s record is pristine, especially if they’ve been around the industry for several years. But if a planner’s record is littered with complaints, it may be in your best interest to continue the search.

It might be best to work with a fiduciary financial advisor. These advisors are legally required to put your needs first and are often held to a higher standard.

5. Be on the Lookout for Potential Fraud

To avoid fraud on your account, look for an advisor who works with a third-party custodian. This means, while the advisor assists you with your money, another party oversees transactions and other elements about your account.

When firms deal with your money themselves, this can be a red flag.

6. Understand Financial Advisors’ Payments

This could be a great interview question for your potential advisor!

Compensation is a tricky subject and gets a bad reputation. Financial advisors do a lot of hard work and should be making a paycheck! The compensation isn’t the problem – it could be the financial advisor’s motivation.

That’s why it’s vital to interview and check credentials before building a relationship.

But knowing how a financial planner gets paid is important. You could be contributing to their paycheck. A financial planner can get paid three ways: commission off sales, fee-based, or an hourly fee or rate.

A financial planner that works off commission could persuade you to buy a product or service that you don’t need, though it doesn’t mean they will.

Fee-based advisors typically earn about 1% of your assets. Be cautious of these, as they could misguide you to continue earning.

Financial advisors that are paid hourly seem like the safest bet. The’ll often work with clients who are beginning their financial journey.

7. Use Google

Once you’ve narrowed down the type of advisor you’re looking for, consult Google. Find someone in your area or nearby and schedule an interview.

Having a financial planner close is beneficial. But remember, the goal is to find the best financial planner for you. If your search comes up short in your location, it’s possible to hire a financial planner from afar. Many of them may be able to communicate with you through email or through a webcam like Skype.

This is a completely personal decision. Not everyone enjoys communicating electronically and would prefer a traditional meeting. Whatever your choice is, make sure you’re comfortable!

Ready to Hire the Best Financial Planner?

Finding a financial planner takes time and effort, but the benefits are worth it in the end. You gain more confidence in your assets and a voice of expertise to guide you in the right direction. The best financial planners often guide individuals and families through many stages of their lives.

Write down some ideas or goals you have for managing your money, and reach out to a financial planner today.

Eager to learn more about financial advisors? Feel free to contact us to see why we’re the best people for the job!

By | October 11th, 2018|Taxes|

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