Finances can be tricky at best and maddening at worst. Chances are you fall somewhere in between the two extremes. You want to make the best decisions, earn the most money, and set up your heirs for success. The question you may wrestle with is, “How?”
For many people, the advice they get is to find a good financial advisor. This begs the same question, “How?” There are several ways to locate an advisor, but you need to know a few facts.
What is a Financial Advisor?
The term has a broad definition. Essentially, it refers to financial professionals such as financial planners and investment managers. According to Adviser Numbers data, in 2023, 15,855 professionals list themselves as financial advisors. Of this group, you should focus on those licensed or certified with credentials.
How Do I Know If I Need a Financial Advisor?
There is a common misconception that only the elite with a great deal of wealth need financial advisors. The fact is that a financial advisor can help people in various situations who have varying amounts of assets.
There are several factors to help you answer the question, “Should I look for a financial advisor near me?”
You have struggled to manage your finances in the past
You lack the time or inclination to manage your finances diligently
You need someone to help you define your goals and create a strategy to reach them
Your financial life has become more complicated than in the past
You receive a substantial windfall and want to make the most of it
Prepare for your family’s financial health
You are entering a new phase of life, such as:
Buying a home
The birth of a child
Loss of a spouse
Types of Arrangements
A financial advisor can help you prepare for and navigate significant changes in your life while maintaining your wealth. However, not everyone needs the same type of advice from a financial advisor. The most common arrangements made with financial planners include:
A One-Off Service – You may need a consultation on a specific topic and nothing more. A one-time visit to help you plan or clarify finances might be all that you require.
A Long-Term Plan – Many people opt for making a long-term plan with their financial advisor and doing periodic check-ins to make sure all is well. This arrangement leaves room for addressing specific concerns that may pop up.
Ongoing Advice – If there are several facets in your financial world or you need someone with experience to get you through the many challenges you will face, an ongoing advice arrangement may be the best option.
After deciding on an arrangement, your next step is to find the best financial advisor. There is no specific formula for locating financial advisors that will be the best suited to address your needs. However, these tips will help you as you search.
1. Decide What Kind of Financial Advice You Need
Not all financial advisors offer the same services. Some specific topics to consider, include:
Budgeting Advice – By analysing where your money goes, a financial expert can help you direct your resources in the best way possible.
College Planning – If you have a goal of saving for loved ones’ college, your financial planner can help you attain the goal.
Debt Management – A financial advisor can work out a plan to help you pay down your debts
Estate Planning – If you want to use your resources to help the next generation, working with a good financial planner can help you map out your plans.
Insurance Coverage – Identifying gaps in your coverage is one of the many ways a planner specialising in insurance.
Investment Advice – Your advisor will research and find the best places to put your money to help it grow.
Retirement Planning – As you get closer to retirement age, knowing that your retirement is already being planned is a huge weight off your shoulders.
Tax Planning – Working with a tax planning specialist will often involve strategizing ways to decrease the amount of taxes you may pay. It is important to remember that a tax planner is NOT the same as a tax preparation specialist. You will likely need to employ a CPA or tax software to file your taxes.
2. Complies with the Future of Financial Advice (FoFA)
This plan’s reforms ushered in ways to eliminate conflicts of interest. Avoiding a conflict of interest is vital to ensure your advisor is looking out for you.
Not all financial advisors are created equal. When searching for the person or group who will steer your finances into the future, you have every right to expect transparency.
A financial advisor can be a source of information, planning, and advice to help you navigate your financial future. The professionals at Freedom Wealth Services have the experience needed to help you grow your wealth and prepare your finances for the future.