Talking With Your First Financial Advisor in 2023

The year is 2023 and the world of personal finance is forever changed thanks to advances in technology, data, and artificial intelligence. As a result, individuals are now able to more easily manage their finances and access financial advice.

With this newfound freedom comes the need to find the right financial advisor. But how do you know who to trust?

When it comes to investing your hard-earned money, finding a reliable financial advisor can be a daunting task. After all, it’s not just about picking someone who knows what they’re doing – you also want someone who will put your needs first and provide sound advice tailored for your unique situation.

How to Find a Financial Advisor

Referrals

The best place to start is to ask people you know and trust for referrals. Friends, family members, or colleagues who have worked with a financial advisor in the past may be able to provide valuable insights into what makes a good one.

Google

Another great source of information is the internet. A quick Google search can yield a wealth of data on financial advisors in your area, including reviews and ratings from previous clients.

Some good keywords to search for include “financial advisors near me” and “financial advisors in (your city).”

Organizations

Trade organizations like the Financial Planning Association, National Association of Personal Financial Advisors, and Certified Financial Planner Board of Standards are great resources for finding qualified financial advisors. These organizations provide lists of certified professionals who are all held to a certain standard of ethical practice.

Set Up Consultations

Once you’ve narrowed down your list of potential financial advisors, set up consultations with each one. During these meetings, it’s important to ask the right questions in order to get a clear picture of who they are and how they work.

A few good questions to ask include:

• How long have you been in practice?
• What type of financial advice do you provide?
• How do you charge for your services?
• What is your investment philosophy and approach to portfolio management?
• Are there any conflicts of interest that I should be aware of?

Be sure to ask for their CRD number so you can look up their background and qualifications on the Financial Industry Regulatory Authority (FINRA) BrokerCheck website. Taking the time to research their history and making sure they don’t have any past disciplinary issues is important.

Investment losses can occur when working with a financial advisor, and pursuing a lawsuit against your advisor should always be a last resort.

Related Read: Is it Worth Paying for a Financial Advisor?

Understanding Price Structures: Fee-only vs. Fee-based Advisors

When you’re ready to start interviewing potential financial advisors, it’s important to understand the difference between fee-only and fee-based advisors.

Fee-only Advisors

Fee-only advisors are paid solely by their clients; they do not receive any commissions or other incentives from the sale of any financial products. This ensures that your advisor’s advice is unbiased and in your best interest.

Fee-based Advisors

Fee-based advisors are allowed to accept payments from third parties, such as a mutual fund company or insurance provider. In return for this extra income, they may offer financial products with higher fees.

What’s a Fiduciary?

When searching for a financial advisor, it is important to look for one that is a fiduciary. A fiduciary is a term used to describe a professional who has a legal obligation to put their client’s best interests first.

When you find a financial advisor, be sure to ask them if they are a fiduciary and make sure that they sign an agreement stating so. This is important for protecting your assets and ensuring that your advisor will always act in your best interest.

Look At Their Track Record

Once you’ve found a few potential financial advisors, it’s important to look at their track record before making any decisions.

While they will not be allowed to share intimate details about their clients, they should be able to provide you with general information about their investment strategies and performance.

You can ask questions like:

• What’s your client retention rate?
• What is your average return on investments?
• Do you have a minimum investment amount that I need to meet?

These questions will help you get an idea of what the advisor can do for you, and whether they are a good fit.

Understand Why You Are Looking to Hire a Financial Advisor

Before you hire a financial advisor, it is important to understand why you are looking for one in the first place. Are you trying to save for retirement? Are you looking to invest your money and create wealth? Do you want help with budgeting or debt management?

Understanding what your goals are can help narrow down the list of potential financial advisors, so you can find one that best suits your needs.

Some financial advisors are better at retirement planning while others are focused on investments. So make sure to find one that specializes in the type of financial advice you need.