Many people think that only rich people have financial advisors, but this couldn’t be further from the truth. These advisors will make your life much easier, which is why you should definitely consider hiring them if you can afford to. Financial advisors will be able to help you make the right decisions no matter what type of situation you’re in. They will be able to come up with plans on how to plan your future and grab the right investment opportunities. Not to mention that they can also help you when you find yourself in financial trouble. Nevertheless, it’s important that you choose the right financial advisor.
Determine Your Needs
This is the first thing to acknowledge before choosing a financial advisor. Do you need a plan for your retirement or do you want someone to consult on an investment idea? Due to a wide variety of needs, there are different advisors and planners that are licensed and certified to serve different purposes. In order to save your time and make the best decision, you'll be required to inform yourself about these credentials.
If you're seeking help for a particular project or to consult someone on momentary issues, a person with the title of a financial planner would be your best option. These people usually charge their work based on an hourly rate or by a project. A common rate for such experts is between $150 and $300 per hour.
On the other hand, if you're willing to hire someone to help you on an ongoing basis, fee-based advisors would be the most cost-effective solution. In this case, you should opt for a financial or investment advisor. These people will charge their accomplishments as a percentage of your assets. The more projects you're willing to take with them, the lower the percentage will be.
Run a Background Check
Before hiring someone to help you manage your finances, make sure that you've thoroughly researched the person. This means that you should check if any criminal records arose from the advisor's previous clients. This will assure you that you're dealing with a reliable person. There's one more thing to keep in mind when running a background check, and that is to see if there are any recurring investigations by investment industry groups or financial planning regulatory bodies against your advisor.
Talk To Few Financial Advisors
"A good relationship is the backbone of a successful partnership," says Patrick Dwyer of Merrill Lynch an experienced wealth advisor. Hiring an advisor means that you're going to spend a lot of time with the person. Therefore, make sure not to choose someone who'll be making you anxious. In order to do this, speak to several different experts, especially if it's your first time hiring an advisor. This way, you'll also get to know the average price for your needs.
The fiduciary pledge is a rule that requires financial advisors to act as fiduciaries. It is a legal and ethical form of obligating your advisor to put your best interests before their own profits. By taking this pledge, your advisor will be required to tell you if any conflicts of interests occur. He or she will also have to inform you of the services that he or she provides, the expected compensation, disciplinary actions against him or her, and the full range of fees before any contracts get signed. Although not all advisors offer this pledge, be sure to look for the ones who do.
The Fine Print
When you decide which person to hire, it'll be required to put the deal on paper. Before you sign it, make sure that you've thoroughly read the fine print. In order to assure yourself that you've understood everything, consider talking to your lawyer. This way, there will be no misunderstandings.