Investing in your future is one of the most important decisions you can make. When it comes to choosing a financial advisor, it can be difficult to know when you’ve found the “right” person.
Why is it so tough? Your financial situation, hopes and dreams are personal! Not many realize what financial advice really entails, so how can you know if service is up to standard?
Here are some tips on making the right decision to ensure peace of mind when it comes to your finances.
1. Speak up
Being shy won’t help when meeting with a potential advisor. Think of this as a job interview and you’re doing the hiring. Ask them about their background, their philosophy on financial planning and, of course, their portfolio. Have they provided like-minded clients with success?
A great way to start the conversation is to ask about their experience so you can determine compatibility. Even the most talented investor is not much help without understanding your needs and properly communicating.
2. Do your research
More likely than not, you heard about your potential advisor from a friend or trusted source. Even so, it’s a good idea to do your research ahead of time. Are they registered with any online sources? Do they have credible financial designations? What is their education and experience? Knowing these will help you determine their capacity as a financial advisor. Searching online for reviews and feedback from others can be helpful before stepping face to face with a potential planner. Walking into your first meeting knowing your stuff will help you feel prepared and confident prior to discussing big, important topics.
3. What do you need
Knowing what services and help you actually need from a financial advisor is not always clear. You may know you need a professional to help, but knowing what services you truly need is another story. This is where your rationale and gut come in.
It’s up to your financial advisor to explain what alternatives are available and what services can be fruitful and promising for you. This is when an advisor should be asking you all about yourself and your financial goals. This is also when you should be asking the advisor all about his/her services and what they can help you with. Go with your gut. Are they trying to get to know you? Do they seem interested in becoming familiar with your financial goals and timelines?
If you have a good rapport with an advisor, you should be able to walk away with a clear idea of services they offer that will help meet your goals.
4. Trust your gut
Overall, it’s important to remember to follow a gut feeling. You should feel comfortable speaking to your financial advisor. If it feels forced or like you’re speaking to a salesperson, those are issues to watch for. Here are some elements to run through in your mind when making the decision:
a) Financial advisor vs. salesperson: Does the advisor feel more like a salesperson, or does it feel like they could be a partner in your financial future? If it sounds like they have a preconceived notion about what you need, or if they’re trying to sell you a pre-made package before taking the time to get to know you, that’s a serious red flag.
b) Good vs. bad listener: The only way a relationship with a potential financial advisor is going to work is if they really listen to you. Are they asking you enough questions about your financial history and future goals or plans? Are they trying to sell you on something you don’t feel comfortable committing to? Your perfect financial advisor will listen to your goals, adjust their offerings to your needs and make sure you understand and are comfortable with every decision.
c) The honest policy: An essential and difficult part of your financial advisor’s job will be to honestly tell you exactly how it is with transparency about their services. Are they giving you vague responses or skirting around the questions you’re asking? They should be able to provide clear and succinct reasoning behind any service suggested. If they can’t, there’s a problem.
Like most relationships in life, trust is an integral facet to the success of a partnership with a financial advisor. You want somebody who is prepared to invest in your future with the same honesty and integrity as you are. Ultimately, gauge your gut instinct and comfort level, ask the right questions and be prepared to take some time to think it over. Keeping these tips in mind will ensure you move forward with the perfect partner in harnessing positivity for your financial future.