Money is serious business, and choosing a financial advisor is an incredibly difficult decision to make, especially for someone who has very little grasp of all the dollars-and-cents lingo (that’s why you seek help, right?). As a writer, I work with words, not numbers, so when it comes to handling my money, I need someone else to take charge. But how do I find someone I can trust?
Make a Plan for Life
In general, a financial advisor or financial planner is a professional who will help you manage your money in both the short and the long term. Whether you want to buy a house, plan for retirement, provide for your children’s education, or simply get things in order, guidance from an experienced person whose emotions aren’t wrapped up in the decision-making process can be invaluable. Even if you don’t have a lot of money to invest, a financial advisor can ensure that what you do have is safe and positioned to grow, and that you are on the right track to maximize your yield potential.
Questions, Questions, and More Questions
Your financial advisor is really the person who determines your future. Will you be able to afford a house? Retirement? Your children’s education? You can’t ask enough questions to make sure that the right person will address these concerns responsibly.
What experience/qualifications do you have, and what services do you offer?
The terms “advisor” and “planner” are vague and don’t adhere to any industry standard. Pretty much any financial professional can use them if he or she wants, so make sure to ask if the person you’re considering hiring is a certified financial planner (CFP), a certified public accountant–personal financial specialist (CPA–PFS), or a chartered financial consultant (ChFC) to make sure you’re hiring someone with integrity and experience.
Financial advisors also vary in terms of the specific services they offer, according to their credentials, licenses, and areas of specialty. According to the CFP Board of Standards, advisors must be licensed to sell insurance or securities products (like mutual funds or stocks) and must register with state or federal authorities to give investment advice. Some cover a wide range of topics, while others specialize in specific areas, like estate planning or tax issues.
If you have a particular concern, such as retirement planning, you may want to find an advisor with experience in that area. When interviewing potential advisors, ask how long they have been in the field, and for a brief overview of their records and a summary of how their past experiences relate to their current practices. Check their certifications and ask them what they do to stay current with changes and developments in their fields. It’s also a good idea to seek references from another professional you trust, like your attorney.
