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Attleboro Wealth Management

Finding the Right Financial Advisor Based on Your Needs

Choosing the right financial advisor is an important decision that can have a significant impact on your financial future. With so many options available, though, it can be overwhelming to determine which one is best for you. Below, you’ll find tips to help you throughout the financial advisor selection process so that you can partner with a professional who meets your unique needs.

First, Why Financial Advisor Selection Matters

Before we jump into the promised financial advisor selection tips, I want to spend a moment on why this decision is truly critical. Your finances are one of the most confidential and significant aspects of your life, and the professional guidance you receive can make or break your ability to meet your financial and life goals.

So, as you begin the financial advisor selection process, think of it as the chance to hire an expert to help you achieve your unique goals. Be forewarned: many people with financial “advisor” titles act more like salespeople. They earn commissions by selling you financial products that you may – or may not – truly need or benefit from. It’s best to avoid these folks and look for a financial advisor who has a fiduciary responsibility to work with your best interests in mind. On that note, let’s get into the tips.

Tip #1: Insist on a Fiduciary

Many people are surprised to learn that not all financial planners are required by law to act solely with your best interest in mind. This makes it vital to select one who is required by federal law to meet the fiduciary standard of care. This includes registered investment advisers (RIAs) registered with the Securities and Exchange Commission who are regulated under the Investment Advisers Act of 1940, and financial advisors with a CERTIFIED FINANCIAL PLANNER™ designation or Chartered Financial Analyst® designation.

Broker-dealers are also regulated by federal law, but they are only required to meet the weaker “suitability standard of care,” standard. This means you may or may not be getting financial recommendations that truly serve your best interests. So, as you continue with the financial advisor selection process, be sure to check the credentials of any professional you are considering. You can verify an advisor’s credentials through the CFP Board or the CFA Institute.

Tip #2: Understand How the Advisor Gets Paid

During your financial advisor selection process, you’ll likely come across “free” financial advisors. Be wary: if you aren’t paying them for their work, someone else is. Who that someone else is matters quite a bit. It’s fairly common for them to be working for a specific financial product company, and you’ll want to avoid this. You’ll typically find more value working with someone held to a standard of care to work in your best interests, rather than someone who is focused on making sales and earning a commission.

If you’re unsure whether an advisor is commission-based, you can ask these questions:

  • Do you maintain an affiliation with a financial product company?
  • Do you earn a commission on financial product sales?
  • Do you earn a commission on stock transactions?

How they answer will help you determine whether they can provide you with advice you would trust to be unbiased.

Note that some fiduciary financial advisors may earn a commission on insurance products, while still fulfilling their fiduciary responsibilities to clients.

Tip #3:  Seek Clarity

Financial planning can be confusing and complex, especially given all the terminology you’ll encounter. It can start to sound like a foreign language! Any worthwhile financial advisor should be able to answer your questions about concepts, products, and strategies. Remember that obscured or incomplete answers are not true answers, so seek out complete clarity. If an advisor you are considering dodges questions, uses financial terms without providing clarity or leaves you with a bad gut feeling, these are red flags.

Note: you’re not just looking for a financial advisor who can provide clear answers to your satisfaction. An important part of the financial advisor selection process is also finding one who can provide clarity without making you feel incompetent or like you’re asking too many questions.

Tip #4: Make Sure YOU Are Understood

So, we’ve already covered why it’s ideal to find a financial advisor who is a fiduciary, who is compensated in a way you’re comfortable with, and who provides you with clear and complete answers. There’s another critical ingredient to finding the best financial advisor for you, however, and it’s all about active listening.

During your financial advisor selection process, don’t underestimate the importance of truly being heard and understood. A financial advisor who is truly committed to his or her work will not only listen to what you’re saying, but also ask questions about what’s important to you. They should seek to understand your goals and values, and then use that information to craft you a unique, personalized financial plan that is in alignment with what matter most to you.

Financial Advisor Selection: Helpful Questions to Ask

As you meet with various financial advisors, these questions can help you quickly address some of the critical points mentioned above, and more:

  • Are you a fiduciary?
  • What are your credentials?
  • What is your fee structure and how are you paid?
  • How will we communicate moving forward?

Of course, there isn’t a limit on how many questions you can ask. Any financial advisor worth your time and money will answer as many questions as needed to help you make an informed decision about what is best for your financial future.

Concluding Thoughts on Finding the Right Financial Based on Your Needs

Money is a tricky topic, and your finances impact your life in many ways. Building a relationship with a trusted financial advisor should give you peace of mind for years to come. If you’re engaged in financial advisor selection now, don’t settle for someone who feels “mostly” right. And, if you have an advisor already but you aren’t feeling good about the relationship, it’s never too late to find someone better suited to your needs.

At Attleboro Wealth Management, we recognize what a critical and personal decision it is to entrust a financial advisor with your hard-earned dollars – and your financial future. We meet the fiduciary standard for each client, and we pride ourselves on our friendly and professional approach to fulfilling each client’s individual needs. Contact us today for a no-obligation conversation, and we will be happy to answer any questions you may have. We look forward to hearing from you!

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