Whether planning for retirement or evaluating different investment options, people seek the assistance of a personal financial advisor for many reasons. As valuable as professional financial services are, not every advisor is equipped to help every investor. For instance, a high net worth individual requires an advisor who understands their complex financial situations. To facilitate more effective personal financial management, utilize this guide to find an advisor best suited to meet your needs and desires.
Reflect on Your Financial Situation
Think about the aspects of your financial circumstances that you need the most guidance with before consulting with an advisor. Knowing what services you need makes it easier to pinpoint an advisor with the expertise to assist you with finances.
Working with a personal financial advisor that offers comprehensive services is sensible, especially if you have various concerns. Typically, these advisors are skilled in multiple areas, such as general wealth management or estate planning. This type of financing planning may be more beneficial for wealthier people, who need assistance with reducing their tax liability or deciding how to allocate money to beneficiaries.
Recognize the Different Kinds of Financial Advisors
Unlike with some other professions, no federal law dictates who can or cannot label themselves a financial advisor. As a result, many people have the designation, but not all offer the same services. The following are some common titles you may find when researching personal financial advisors:
This general name refers to many professionals operating in the financial realm. Bankers, stock brokers, insurance representatives, and tax professionals constitute financial advisors.
These professionals work with wealthy people, helping them manage their assets and offering related financial assistance. In this context, a wealthy person has over $1 million in liquid — or easy-to-access — resources.
Certified Financial Planner (CFP)
One of the best financial advisors available, CFPs earn board certification that represents their intensive training, commitment to observing ethical standards, and dedication to putting clients first. They often consider their clients’ overall financial situation to develop strategies for meeting long-term goals.
Registered Investment Advisor (RIA)
As the name indicates, an RIA recommends the best investment options based on a person’s financial circumstances and goals. Some securities they may discuss include stocks, bonds, mutual funds, and exchange-traded funds (ETFs). They register with the United States Securities and Exchange Commission (SEC) to gain the designation.
Chartered Financial Analyst (CFA)
CFA Institute offers a certification program that tests the ability and integrity of financial analysts. These professionals work with either individuals or corporate clients, giving them strategies for using money to reap the most profits. The program consists of a three-part examination that covers multiple topics, including accounting, money management, and ethics.
Review Their Commitment to Their Clients
There is a significant downside to the numerous personal financial advisors — it can be challenging to determine which truly value their clients’ needs. A key indication of an advisor’s dedication to acting in the client’s best interest is the mention of fiduciary duty. This phrase means the advisor is legally obligated to place their clients’ concerns above their profits.
Some advisors do not observe fiduciary duty but are bound to a suitability standard. These financial professionals are only responsible for recommending products that suit their clients, and they may suggest the more costly products that earn them a higher commission.
Request a Meeting with a Potential Advisor
Once you narrow down a few options, contact the advisor to schedule a preliminary meeting. To prepare for this consultation, create a list of questions to evaluate if the advisor is capable of helping you achieve your goals. Some questions to consider include:
- What is their approach to financial planning?
- What services do they provide clients?
- Are they fiduciary? If so, do they act as a fiduciary in every case?
- How do they earn their money?
- What are their credentials, and are they a part of any professional groups?
- What does their average client look like financially?
- What is the standard rate for their services?
- How often do they meet with each client?
- How do they communicate with clients (i.e. email or phone call)?
- Do they work with attorneys, accountants, or other advisors to augment services?
- Are there conflicts of interest in the advisor offering you financial guidance?
Seek a Reliable Personal Financial Advisor
No matter the complexity of your financial situation or the extent of your needs, choosing an advisor that values clients is critical to experiencing success. If you want a personal financial advisor that honors their fiduciary duty and offers a wide selection of services, turn to Park Place Financial. Our team of experienced CFPs works collaboratively to find the best solutions for each client, developing customized financial plans that address current and future concerns. Contact us today to learn more about personal financial management or to schedule your complimentary financial checkup.