Finding the Right Financial Advisor

Finding the right financial advisor can be a challenging task. How can you be certain that this person or firm is the right choice? Managing your financial future is a significant responsibility, so it is essential to explore your options thoroughly. Look below to gain insight on whether you should stick with your current advisor or seek a new one to handle your investments.

Among the most discussed elements of financial guidance are the associated fees. The financial industry employs various methods to generate income, including commissions, advisor fees, 12b-1 fees, and the list goes on. Engage in an open conversation with your current advisor about fees and cost reduction; if clarity is lacking, it may be time to explore other options.

Different forms of financial advice are bound by distinct legal statuses. The pinnacle of ethical standards is a fiduciary duty, in which an advisor is legally obligated to prioritize the clients and act in their best interests. Loyalty and care are the hallmarks of this advisor-client relationship. Notably, financial advisors and consultants affiliated with large financial institutions and broker-dealers often lack a fiduciary duty to their clients, potentially leading to conflicts of interest.

Selecting the right advisor is very important to your financial success, but ask yourself a few questions: Why are you investing in the first place? To plan for retirement? To generate income? To protect your assets against inflation? Is your portfolio worth $25,000 or $25 million? Do you require expert tax guidance? The complexity of your financial situation will dictate the level of advice necessary from your advisor. Additionally, remember that you need not rely solely on one individual; if doubts about your current advisor arise, don't hesitate to seek a second opinion from another financial professional. Here are a few questions to ask:

• How will you manage my portfolio?

• Do you choose investment products yourself?

• Will my investment portfolio be customized to reflect my specific needs, objectives, and tolerance to risk?

• Do you primarily use mutual funds, ETFs, or individual stocks when you choose equities?

• Are your fee structures transparent?

• Is your compensation commission-based or fee-only?

• Will you communicate regularly with me?

• Will you schedule a fixed number of meetings annually, or can I contact you to arrange meetings as needed?

• Do you offer virtual meetings?

• Who are your clients? 

Ultimately, one of the most important aspects of choosing the right financial advisor is simply to choose someone with whom you feel comfortable and trust to always prioritize your best interests.