Smarty Tips for Working with a Financial Advisor

A financial advisor is an expert at managing finances, investments, taxes, and retirement. They help clients set and achieve goals, and give advice on how best to save, invest, and grow their money.

When do you need an FA?

Whether you have recently experienced a significant life event, are looking toward the future, or just have questions about your financial situation, you can turn to a financial advisor.

Getting married is an excellent time to organize assets, combine and reduce debt, and adjust savings goals. When it comes time to purchase a home, your FA can help form a realistic view of what you can afford and the current status of the market so you can be sure you’re making a good investment. If a baby is on the way, an FA can help adjust your budget and launch a college savings plan. Following the unfortunate death of a family member, turn to your FA for estate planning, and advice on handling your inheritance.

Getting out of debt is another popular reason to turn to an FA. They can help revise your budget, create a debt repayment plan, and identify ways to accelerate the process. Changing jobs or receiving a raise puts new opportunities for retirement planning at your disposal. A financial advisor can help you develop an investment strategy and evaluate investment opportunities. If you own your own business, your FA can help you organize expenses, understand matters related to your business such as taxes and employee benefits, and even begin succession planning.

How to Select a Financial Advisor

When selecting the best advisor for your family, experts recommend finding a professional with the certified financial planner (CFP) designation. The CFP is an instant signal of credibility, and proves the advisor has passed a rigorous exam, surpasses governing agency standards, obtains continuing education, and is committed to a code of ethics. Members of the National Association of Personal Financial Advisors (NAPFA) meet CFP requirements, are organized by area of specialty, and operate on a fee-only, non-commission basis.

One of the best ways to begin your search is to ask those you trust. Solicit recommendations from family and friends, as well as your extended network like the local chamber of commerce and your bank or credit union. Be sure to request references and talk to some of their current and past clients. You may also want to research their criminal background and ensure their credentials are up to date. 

During your evaluation, be aware of fees. Not all financial professionals are the same, and likewise, their fees vary. Some charge a flat rate or a percentage of assets, while others rely on commission.

Developing your working relationship

There are no guarantees, setting expectations early can help you make the most of your relationship. When reviewing your spending habits and setting goals with your financial advisor, discuss your risk tolerance and establish a plan for regular check-ins to gauge progress, and adjust strategy as needed.

As we age, financial situations and goals become more complicated, but an experienced professional can help you resolve the issues that arise along the way and ensure you’re on the path to financial freedom!

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