There are plenty of decisions to make on a daily basis, and some of those choices are weightier than others. Whether it’s finding a doctor, a school for your child, or a financial advisor, how do you know what will be the right fit for your situation and personality? With other 200,000 financial advisors across the country, it can be overwhelming to go about your search.1 The financial advisor you choose to handle your family’s wealth will have a significant impact on your confidence, investment strategy, the fees you pay, and your confidence in your financial future. This is not a decision to take lightly, especially since each advisor has a different level of service, expertise, and ability.
Often, when you find a good advisor, you can develop a strong relationship that can last a lifetime and even through multiple generations. As such, you should take your time to find an advisor that meets your family’s needs. When you start your advisor search, ask potential candidates these 10 questions:
1. Are You a Fiduciary?
An advisor who serves as a fiduciary accepts a responsibility to put her client’s interests first and foremost in all decisions. A fiduciary is supposed to avoid conflicts of interest and remain unbiased in her recommendations and advice.
2. What Financial Planning Services Do You Offer?
Not all financial advisors can provide comprehensive financial planning. Some cannot sell insurance or securities, such as mutual funds or stocks, if they don’t have the appropriate licenses. Ask a financial advisor what services they provide and whether or not they have a specialty. Some areas include financial, retirement, risk management, investment planning, insurance, tax guidance and college savings planning.
3. What is Your Planning Philosophy?
It’s important to work with an advisor who shares a similar planning and investing philosophy as you. If you’re nearing retirement, you may not want to work with an aggressive stockbroker, whereas if you’re new to investing, you may not want to be too conservative. Talk with an advisor about how he or she guides clients’ investing and financial decisions. A good financial advisor will get to know your goals and risk tolerance with the goal to create, review, and help you maintain a healthy investment portfolio, taking into consideration benchmarks, market volatility, suitability, tax efficiency and diversification.
4. Who Else On Your Team Will Be Working With Me?
At some firms, you may work with multiple financial advisors depending on your appointment time or needs, while other firms may pair you up with one financial advisor with whom you’ll work with exclusively. This is important to know so you can meet the other team members with whom you might be collaborating.
5. How Much Do You Charge?
Financial planning and investment costs can be confusing. And too often, financial advisors don’t readily disclose their fees. Good financial advisors strive to be transparent with any fees that are part of your portfolio so clients always know what they’re paying and what they’re receiving. You should feel comfortable with your strategies and confident that there are no hidden fees eating away at their hard-earned savings.
6. Who Are Your Clients?
Some financial advisors specialize in serving a specific demographic or level of investable assets, so you’ll want to find this out before choosing an advisor. For example, if you’re a business owner, you may be better suited to work with an advisor specializing in helping business owners. If you are a public employee, you may want to work with someone who has experience working with people with your benefits package.
7. How Much Personalized Service Do I Get?
Many advisors meet with their clients once per year. Some charge extra for additional meetings or consultations. Find out what to expect in terms of regularly-scheduled meetings and what you need to do for ad-hoc questions, or changes in your circumstances.
8. Do You Receive a Commission On Trades?
Some financial advisors working with big banks earn their income on commissions. The problem with this is that advisors working on commission may be inclined to sell products that aren’t best suited for a client’s needs. An independent financial advisor that charges a percentage of your assets under our management makes more money when your investments perform better.
9. What Is Your Succession Plan?
Your financial planner may retire at some point. (Don’t you think they plan for their own retirement as well as yours?) What happens to your account, your service-level, your relationship when this happens. Many planners simply “sell their book” to the highest bidder. In these situations, you may suddenly be working with a stranger that may or may not have similar service levels and priorities. Ask about your retirement planners plans for their retirement.
10. Have You Ever Violated Any Standards or Laws?
Take your time and trust your intuition when selecting your advisor. The relationship should feel right and you should never feel pressured to make a decision quickly. But you can double-check your instincts and look up an advisor’s professional history by visiting FINRA’s BrokerCheck. This database will also show you the years of experience an advisor has and the licenses and credentials he or she has.
An advisor should be happy to answer these questions and any others you may have about how they operate.
At Savaglia Investments and Planning, we believe in complete transparency and want our clients to feel comfortable working with us and asking any questions they may have. If you’d like to learn more about our answers to these questions or any others you may have, don’t hesitate to reach out to us. You can start now by scheduling a complimentary get-to-know-you appointment online!
Advisor Representative of and Securities and Advisory Services offered through Cetera Advisor Networks LLC, member FINRA/SIPC. Cetera is under separate ownership from any other entity.
Crystal Sdano is a financial advisor at Savaglia Investments and Planning.
Crystal asks questions to uncover and plan for your needs. Her commitment is to become your trusted financial advisor and help you create a plan to meet your short-term, and long-term goals. Learn more by connecting with Crystal on LinkedIn or visiting www.savaglia.com.
Please Note: The information being provided is strictly as a courtesy. When you link to any of the websites provided here, you are leaving this website. We make no representation as to the completeness or accuracy of information provided at these websites. Nor is the company liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third-party technologies, websites, information or programs made available through this website. When you access one of these websites, you are leaving our website and assume total responsibility and risk for your use of the websites to which you are linking.