In the world of financial services, there are a lot of options outs there. The challenging part is know exactly what services they provide and how to find a good financial advisor. So where do you begin? First thing to look at is what type of firm it is.
There are many types of institutions that offer financial services from bank, credit unions, brokerage firms, and insurance companies to name of few. The problem with those mentioned is that they are going to offer biased advice. Ideally, you need to find an independent firm, such as a Registered Investment Advisor (RIA). RIA firms usually do not have affiliations with big firms that would influence the advice or service they offer.
The size of the firm is also important. Understanding the number of clients at that firm as well as the number of advisors at that fir. Larger firms tend to have their advisors working with hundreds and hundreds of clients. That formula leaves very little time for the advisor to adequately service each client and cover the entire spectrum of financial services.
Next consider what services they offer. Look for someone who is truly a financial planner. Most all firms will offer some form of investment management. Some may even pass that off as financial planning even though it really isn’t. Financial Planning involves very specifically laying out a road map of where you want to go. This is key to have because that will direct how your assets should be invested. Your financial advisor will be able to help you identify your financial goals. They will help you identify what is realistic and what is not. Working with a financial advisor who is creating, implementing, and maintaining a comprehensive financial plan will allow you to measure your progress on your goals and help you side step big mistakes.
A financial advisor who is truly looking out for your best interest will address and advise of the following subject areas:
- Income Planning and Cash Management
- Tax Planning
- Estate Planning
- Social Security Planning
- Medicare Planning
- Insurance Planning
- Charitable Giving
- Debt planning
- Loss prevention
All these aspects of your financial picture are not independent of each other. They all are working together and can be impacted by one another. So, leaving one area of your financial picture untouched can have harmful consequences.
For many people who work with an advisor, all they really see about what their advisor does for them is what happens during the 1-2 times a year they meet. It is important to learn more about what they are doing throughout the year for your benefit. Like an iceberg, all you see is the top of it sticking out above the water. Unbeknownst, to us, the massive part of the iceberg underneath the water. Each day the ideal advisor should be monitoring your investments for under or overweighed positions. All trades should be reviewed and reconciled. Most importantly, the ideal advisor should be communicating via phone or email 18 times per year, with educational material, or information relative your specific situation.
If you feel you are not getting the right attention or do have all aspects of your financial picture taken into consideration, don’t worry, you are not alone in finding a good financial advisor. The good thing is there are firms out there ready to help.
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