Financial advisors are important for those who want to invest wisely and build wealth. But not all financial advisors are created equal.
Working with an advisor who doesn’t make you feel valued or heard is a big mistake. So, how can you find an advisor that you can trust?
Know Your Needs
A financial advisor can help you save money, invest, and meet your long-term goals. But, with about 200,000 financial professionals who call themselves advisors, where can I find financial advisors Paramus NJ? You’ll want to know whether they are fiduciaries, which means they put your interests first. You should also understand their certifications, fees and minimums.
It’s also a good idea to ask about their specializations and how they handle situations similar to yours. You don’t want an advisor who talks nice to you but fails to follow through on their recommendations. Knowing how they get paid can also help you understand their incentives. You want an advisor who has clear and transparent compensation. Then you can feel confident they’ll work in your best interest.
Look for Credentials
Financial advisors can have various titles, designations and certifications. It’s up to you to ensure they are qualified to help you. Find their background on FINRA’s Broker Check website and your state’s insurance department.
Look for credentials like a certified financial planner, investment adviser, CERTIFIED FINANCIAL PLANNER TM professional or chartered financial consultant. These professionals typically have more experience than a traditional human advisor and offer services like budgeting, tax help and asset management.
It’s also important to know how they make money. Some advisors earn commissions, while others act as fiduciaries. It’s best to choose an advisor who always works as a fiduciary. A fiduciary will put your interests ahead of your own and only recommend appropriate products.
Do Your Homework
The financial world is complex, and it’s easy to get tripped up if you don’t know what to look for. That’s why it’s important to research before choosing an advisor.
Check out your potential adviser’s credentials and work history, and use tools like FINRA Brokercheck or the Securities and Exchange Commission’s Investor Advocate Database to see any complaints. Look for certifications, such as the CFP designation, which demonstrates they’ve completed professional training, and for membership organizations that require members to act as fiduciaries for clients.
You’ll also want to understand how an advisor is paid. Some will charge a flat fee for their services; others may earn a commission on products they sell you. It’s important to find an advisor who acts as a fiduciary and puts your interests first, Loper says.
Interview the Advisors
Many financial professionals call themselves “advisors,” but not all are created equal. Some, such as securities brokers and insurance agents, are paid on commission, which can create conflicts of interest. You want to find an advisor who is a fiduciary and who will work with you to identify your goals, then provide a comprehensive plan of action to help you reach those objectives.
You should also find out whether your potential advisor takes a holistic approach to wealth management, considering tax strategy, estate planning and even charitable giving. This is critical, especially during periods of market volatility.
It would help if you also asked the advisors to describe their investment philosophy and experience working with various clients, such as those in retirement or with small businesses.
Don’t Be Afraid to Say No
If you don’t get along with or trust an advisor, keep searching until you find someone who does. Continuing to work with an advisor that makes you uncomfortable or distrustful can lead to unnecessary stress, and it’s not worth the financial cost.
You should expect kindness and courtesy from your advisor, but it’s important to look beyond that when evaluating potential advisors. Settling for an advisor who’s just nice won’t help you reach your financial goals.
It’s also crucial to find an advisor who works as a fiduciary. This means they must act in your best interests, which can be difficult to determine in the financial industry where legal guidelines are muddy. Search for fiduciaries who offer a fee-only model to avoid conflicts of interest.
