Post tax season is the perfect time to reevaluate your financial support team. There are countless financial advisors in the United States. Considering each person’s personality, fee structure, communication style, brand and small print, it is enough to make your head spin. To make things easier for you, here are my top five tips for choosing a financial advisor.
1. It is all about trust. You need to feel comfortable with your advisor. 50% of a working relationship is about the services he/she can provide for you and 50% of it is about how you connect with the person. Are you inspired to meet with your advisor on a regular basis? Are you motivated to do the footwork necessary between appointments? Do you actually like and trust your advisor? The answer to all of these questions should be yes, otherwise, keep looking.
2. Get a personal referral. Find people in your immediate community whose relationship to money you respect. Ask them who they use for financial planning, taxes, investment advice and estate planning. Ask them what they like about the individual, the firm and the service.
3. Know what you want. It is worthwhile to write down the qualities you are looking for in an advisor. Here are some to consider: warm, friendly, smart, licensed, convenient office hours/location, expertise in your areas of need, specific gender, and easy to communicate with. It is equally important to know what your immediate goals are: create a monthly budget, build sustainable periodic and safety net savings, design an annual plan, project your finances 5-10+ years out, investment advice, reallocate assets, plan for retirement, save for college, refinance your home, etc.
4. Do your research. Check out at least three different advisors whose services meet your needs. Read their websites, read the paperwork he/she gives you, look them up on Google, Yelp, Facebook, Twitter and Linked In. Meet in person, more than once, if possible.
5. Be prepared with questions and ask all of them. Here are some to consider.
- Do you offer a free consultation?
- How much time should I expect to commit in order to get the most benefit?
- What is your approach to (insert your current needs)?
- Who is your target audience?
- What is your fee structure and how will this change over time?
- Are you a fiduciary (fee only advisor)?
Your finances are deeply personal and should be treated with the upmost care and respect. You deserve to feel heard, empowered and to receive customized services that meets your needs on your timeline. It is your responsibility to choose a financial advisor that you genuinely trust at a price that fits into your short and long term financial picture.