How to Choose a Financial Advisor

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How to Choose a Financial Advisor

Coming off of an extremely topsy-turvy and uncertain year last year, many people are thinking about money more than they were during pre-pandemic times. From layoffs and pay cuts to hospital bills, our financial situations have been front and center in our minds lately. As we begin to regain a sense of normalcy, it’s a great time to think about your finances and get your money organized. One smart step toward financial preparedness is to work with a financial advisor.

Financial advisors seem to be everywhere these days, so finding one won’t necessarily be hard. The tricky part is finding the right one. With so many options, it’s not uncommon to feel overwhelmed. However, doing your due diligence in carefully selecting the advisor that is right for you is critical to your financial future. Here are some tips to keep in mind when searching for your ideal financial advisor.

Choosing a financial advisor starts with you

The first step in your hunt for the perfect financial advisor is to check in with yourself. Look at your values and your priorities, your dreams and aspirations. When it comes to finding the right advisor, it’s important to make sure their values align with your own. Putting pen to paper early on and making a list of the things that are important to you when it comes to your finances will help you weed out the professionals who aren’t right for you.

Consider your financial goals

Assess your personal and financial goals, your assets, and your liabilities. Why do you want to work with a financial advisor and what do you hope to gain from it? Are you looking for help investing? Are you trying to set up an educational fund or a trust for future generations? Do you need help planning for retirement? Different financial advisors specialize in different areas. It’s important to figure out precisely what you require a financial advisor for in order to sort out which advisors may be a better fit than others.

Look at your options

A great place to start when it comes to looking for a financial advisor is by asking friends and family for referrals. If someone you know and trust is able to vouch for an advisor, chances are they are worth looking into. Otherwise, the internet is always a helpful tool. Look at the financial advisor’s credentials, check their online reviews, and study their website so that you have a solid understanding of what they’re all about. Once you have found a few different advisors who look like they might be a good fit, take the time to interview them. Schedule introductory calls or meetings to discuss their services in regards to your needs.

Consider the cost

An important component to keep in mind during your search is payment. Look at your own budget to realistically determine how much you can afford to spend on financial advisory services. Also, keep in mind how the advisor gets paid. Do they earn commission or are they fee only? Commission based financial advisors make money by earning commission from third parties, while fee-only advisors earn money from the fees you pay for their services, which are typically charged as flat annual rates, hourly rates, or percentages of the assets they manage for you. While you shouldn’t necessarily rule out an advisor based on how they get paid, it’s important to understand what it means, both for the service you should expect and the fees you will pay.

Just like no two financial situations are identical, no financial advisor is one-size-fits-all. Taking the time to assess your values, goals, aspirations, and dreams is absolutely critical to your financial planning process. At The Humphreys Group, our individualized financial plans are tailored to our clients’ specific situations, as well as their goals and dreams. We are experienced planners and intelligent investors who are constantly emphasizing the importance of clients’ living their values. Reach out to us for a free consultation today.