It’s the time of year we start to think about what changes we’ll make in the new year. Maybe we have fitness goals, nutrition goals, or our happy place: financial goals.
It’s never a bad time to work on getting your financial health in order. As you start to think through the near-term, longer-term, and what goals you have in your life, it’s smart to seek out a financial advisor who can help you prepare for your future by providing guidance on planning opportunities, navigating taxes, and your investment account allocations.
How DO you go about selecting someone who can help you with your financial plans? Of course you want someone trustworthy and qualified, but how do you know what questions to ask? What qualities should you seek out? What should you be aware of in the process to find someone who is a fit to work with you?
ith financial guidance and wealth management is important!
What are the right questions to ask? What if you’ve been with a firm or an advisor for some time but you’re looking to make a change? What if all the websites of wealth advisory firms you are looking at seem the same? It can be an overwhelming decision.
We recognize how important it is to work with someone trustworthy, who operates with integrity and makes it a priority to get to know you and understand your goals as you head down the path of finding a financial advisor.
Consider the following to help you navigate the choice for working with a wealth advisory firm that fits your needs and will help you achieve your financial goals.
1. Learn about the firm’s background. How long have they been in business and how many assets do they manage? What regulatory standards are they held to? Ask about the firm’s structure and if it’s a registered investment advisor (RIA), broker-dealer, bank, etc. so you can learn more about the differences. At the end of the day, you’re looking for an advisory firm to help you manage your wealth and plan for your future, so it’s important to make sure they’re in good financial standing.
2. How will they be compensated? As you continue finding a financial advisor, know that advisors can earn revenue in a variety of ways: an hourly fee, a monthly retainer, commissions for certain products, or a fee equivalent to a percentage of a client’s assets under management. Partnering with a fiduciary, someone who works in your best interest, is key. The answers to these questions will help give you a better understanding of how the firm conducts business.
3. Explore individual qualifications and experience. Look for firms with professionals who hold credentials including CERTIFIED FINANCIAL PLANNER™, Chartered Financial Analyst®, Certified Public Accountant (CPA), and MBAs with a focus on finance, investment management, or taxes. You can check out our recent blog to learn more about each of those qualifications. Ask advisors about their experience working with clients in a similar situation as yourself and request references from those clients.
4. Check disciplinary history. Several government and professional regulatory organizations, such as FINRA, state insurance and securities departments, and the CFP® Board keep records on the disciplinary history of financial planners and advisors. Confirm which organizations the advisor is regulated by and contact these groups to conduct a background check.
5. Gain an understanding of the types of services offered. Is this a firm where you can have financial, retirement, estate, and income tax planning completed? Do they offer portfolio investment management? Are all services customized to meet your needs?
Look for a firm that focuses on financial planning first and then selects the investments to align with your personal goals and long-term financial plan. A financial plan, by nature, is not static, but always evolving and must be updated as a result of life events such as marriage, children, job change, etc. The plan should be customized for your situation, and the advisor should review the plan with you on a regular basis to make sure you are on track to achieve your goals. A team of specialists with different areas of expertise can allow for a more coordinated approach.
6. What is their investment philosophy? Do they have dedicated professionals who manage your investment accounts and consider tax consequences when building and monitoring your portfolio? What are the criteria used to select investments? What investment research resources does the firm use? Verify that none of the investments used are proprietary or owned by the firm (you want the best option for you, not the only option). How are the investments monitored on an ongoing basis, and how often?
7. Discuss how they will communicate as you work on finding a financial advisor. What kind of access will you have to the advisor and their team? Find out who will be included on your service team, so you can learn more about their background and expertise. Obtain their names, bios, and gain an understanding of their role on the team.
8. Aim to find a relationship that will be flexible to meet your lifestyle needs will be a good fit. Ask about the security measures in place to protect your financial data. You should have access to a secure online client portal that allows you to view your financial accounts including holdings, allocation, and performance on a daily basis.
Working with the right wealth advisory firm could affect your entire future, as well as the legacy of your family.
Finding a firm with qualified professionals who act in your best interest and maintain transparency will give you a foundation to build a relationship. You should be able to honestly share your personal goals and circumstances, knowing that discretion will always be considered to help keep these details private and your financial information secure.
Domani Wealth is always here to start a conversation, answer questions you may have about your finances, or even be a sounding board as you’re making a financial decision. Get in touch with us today!
