How To Find A Financial Advisor
(Prosperity -Laura E Kirkpatrick) Your relationship with your money is complex and highly emotional. And possibly, the longest relationship you will ever have. The good news is that a threesome will actually help this relationship in the long run. Here, the third party is a financial planner - someone who’s there to help you navigate the complexities of managing your money. Personal financial advisors, experts in investments, tax laws and insurance, will assess your financial needs and help identify and plan for short- and long-term goals.
You’re smart enough to invest your money, but why take on another job when there are trained professionals to help you manage and grow your money?
So how do you find this person? The number one way most of the financial advisors I spoke with acquired clients was through word of mouth. “Try to get recommendations from friends in similar situations, people you really trust,” says Jim Adams, a financial advisor in Vermont (and a really great ski instructor on the weekends). “It’s a roulette shoot when you just choose a name from the phonebook, you might end up across the table from someone interested in only commissions.”
Next, meet with a few of the best prospects until you find someone whose personality works for you. As with any profession, people bring their own individuality to the job. For example, some use the same principles as yoga to create harmony and self awareness in your relationships with money; others may be more technical.
Adams, who is part of a small partnership of advisors, points out that people associated with big firms may be trying to make a certain sales number. That kind of pressure can lead people to make decisions more to their benefit and much less to their customers’ benefit. He also cautions to watch out for gratuitous fees, like commissions from frequent trading on your investments, or an advisor who wants to sell you more and more additional products – like life insurance to a young person (this is usually not necessary).
A good rate plan varies with each financial advisor, as some scale their fees to the demands of the client. "I base my fees on the complexity of each client's situation,” notes Katherine Wahlberg a financial advisor with Ameriprise. “So I do not have a single flat ‘fee’ that I charge all my clients.” She points out that a large firm like Ameriprise, the client may be offered proprietary products researched and developed for that firm’s clients.
Most advisors offer some sort of scale, but may include a flat planning fee for the initial consultation, which is determined by the complexity of your needs. This fee should include production and implementation of a financial/estate/retirement plan. If you are looking for asset management, the fee is usually a percentage of the assets under management. This is usually a sliding scale, where the percentage goes down as the value of the assets increase. According to The New York Times, many advisors usually charge one percent (or $1,000 for every $100,000 saved). If you're looking for something slightly different, planners associated with the Garrett Planning Network charge an hourly rate (this might be good for those who don't have a large portfolio).
“Look for someone who wants to be an educator- someone who can give a reasonably good explanation of what you are invested in and how these investments are going to help you reach your goals,” says Adams. Wahlberg also recommends you look for someone with accreditation. You can tell this by letters appearing after the advisors name, like CRPC (Chartered Retirement Planning Counselor) after Wahlberg’s name. As Adams, an AAMS (Accredited Asset Management Specialist) points out, anyone can hang out a shingle and call themselves a financial advisor.
Mitch Glicksman, a registered financial advisor in New Jersey and a member of our board, says he has been called on to help his clients with major financial decisions from buying a house to what kind of car. You may not be looking for someone to help you debate a Prius versus Honda Accord, but your financial advisor should always take your calls, and work with you on any aspect of your financial health. This is someone who you can call to re-assure you when you’re worried about the market.
All of the financial advisors interviewed for this article agreed that this relationship should be transparent and you should trust your intuition. Ideally, your relationship with a financial advisor, unlike that other threesome you’ve been daydreaming about, will be long term.
