Last Updated on April 26, 2017 by Diane Hoffmaster
From the time my husband and I first moved in together after college, we have had financial goals. We started saving small amounts of money very early in life, even when we were struggling to pay the bills. We bought our first house at the age of 27 and when our first child was born that same year, we opened a college savings account as well. While we have had financial goals our whole lives, we have never spoken to a professional about our finances. We decided it was time to bring in a financial advisor and we have an appointment with one this week. To prepare for our appointment, I started researching what to look for in a financial advisor. Since many of my readers are probably concerned about finances, I thought I would share my findings with you.
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What to Look for in a Financial Advisor
Having a financial goal and a plan to help you reach it is a very important part of adulthood! As with hiring any professional, you need to find someone you can trust. Here are a few important qualities to look for when interviewing potential financial advisors:
Training and Education
Becoming a financial planner isn’t something a person should do without a solid background in finance. That means a degree in the field and relevant experience handling other people’s money. Look to see whether your potential financial advisor has been taking classes or seminars in the field over the last few years. Things change rapidly and they need to stay up to date on current laws and financial trends. Ask for references from friends and neighbors to find someone who has success as a financial advisor.
Is there a consultation fee?
If you are wondering what to look for in a financial advisor, this is an incredibly important factor. The first thing our potential financial planner told us was that you should NEVER pay for information. The consultation we are getting this week is free with no string attached. Don’t pay to talk to someone about your finances. If they can’t offer you an hour of their time free of charge, they don’t really want your business.
Size of Clients
Some professional financial planners have a minimum net worth for their clients. A financial planner makes money when YOU make money. They will make a larger amount if their client is starting off with a large net worth. You don’t want a financial planner who isn’t going to give small clients close attention, just because they won’t be making as much money off of your business. Ask them what their minimum net worth is if they have one.
Long term versus short term outlook
You need to decide whether you are looking for long term investments or short-term, quick turnaround returns on your money. Experienced financial planners understand that the stock market is a long-term investment and will help you manage your portfolio for maximum gains over time. If you are looking to buy and sell stocks quickly to make money fast, a financial planner may not be the best choice for you. Ask them about their experience with both long-term investments and short-term returns on their client’s money.
Go with your gut
You really need to meet your potential financial advisor face to face and form your own opinion. Do they use industry jargon that is hard to comprehend or do they put things in laymen’s terms that you can really understand? Are they trying to push you to buy products through them that you aren’t interested in? If they work on commission, they may be more interested in a sale than they are about you personally. Trust your instincts when it comes to hiring a financial planner.
I am hoping our meeting this week goes well and I am putting together a detailed list of questions regarding our financial goals. I have printed out all of our financial paperwork and am looking forward to seeing what he tells us. If you are planning on buying a house, putting your child through college, retiring, etc. you may want to consider hiring a professional financial planner!
Do you know what to look for in a financial advisor? Did I miss anything?
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I agree, one of the first things that you have to look for when choosing a financial adviser is their training and education. This is especially important if you’re planning to have them help with your family’s financial planning. At that point you would want them to be competent to keep your family’s money safe.