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How To Choose A Financial Advisor
By admin | September 16, 2007
Becoming more serious about your financial life is always a good move. More and more it is becoming increasingly important to start thinking about your savings at a young age so that you can afford to retire in comfort later on in life.
For many people, this means consulting with a financial advisor. Unless you have the time to do plenty of research on your own and learn the various aspects of investing and saving, consulting with a professional is a good move.
There are things you do need to know about however to ensure you are making smart decisions when choosing who you wish to speak with.
Here are some factors to consider in your search for a financial advisor.
Qualifications
Whenever you are going to be placing trust in someone to handle your money, you need to be sure they are qualified to be doing so. Look for someone who is known as a ‘Financial Planner’ or ‘Certified Financial Planner Professional’. There are a few different regulating bodies that they may qualify through so it’s important you are sure they in fact have. These programs usually involve intensive coursework, examinations and then experience placements before they are given the title.
Look For Referrals
Put the word out to your family, friends and co-workers that you’re searching for a financial planner and see if they can make some recommendations. The business of financial planning is largely word of mouth so when numerous people have good experience with one, chances they know what they are doing.
Experience Level
While you definitely shouldn’t hold it against someone who is a bit younger, experience does tend to make a planner more knowledgeable.
The advantages of going with a younger financial planner is that the training they have been through is slightly more recent so they will be on top of the latest techniques and trends to be using. On the flip side of that, they will not have seen as many ‘real life experiences’ as someone who is of an older generation.
Decide which option you feel most comfortable with and then look around for someone who meets your needs.
What Services They Offer
Not all financial planners will offer the same services so it’s particularly useful to inquire about exactly what they do. What they offer will largely depend on what their credentials are, what type of licensing program they went through and what area of investing and planning they specialize in.
Be aware too that many financial planners are solely focused on managing your accounts, not selling insurance, mutual funds, or stocks.
Fees For Services
A very important factor to keep in mind is how much they are going to charge for their services. You obviously do not want to be paying more for their help then you are making because of them so it’s important to weigh costs versus benefits.
Usually the fees they charge will depend upon what all you want done and will either be based on hourly rates, a flat fee or a percentage of what they make you. Going the percentage route is always nice since then they only make money when you do.
Personality Factors
While it may not seem like something too important, you should make sure that you will enjoy working with the financial planner you choose and your personalities easily match up. You need to feel comfortable talking to them about your financial life, and if you are currently in a difficult situation, this can be hard for some. Finding a planner who is understanding and will really listen to your needs and wants is incredibly important.
Availability
It never hurts to ask what their current scheduling availability is. How far in advance do you need to schedule in to see them? Do they keep hours outside of regular office hours? If you work a full-time job somewhere else and have a hard time getting away, this might be something you strongly need to consider.
So before you rush out and book a session with the first financial planner you come across, consider these important points in making your decision.
Topics: personal finance, investing |
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