How to Find the Best Financial Advisor or Planner?

Truth be told, there are only a handful of people who are actually good with their money. In other words, they know the drill better than most others — how much to spend, how much to save, where to invest, and above all how to track their ROI. The statistics further substantiate.

The National Financial Council in a 2021 survey reported how an average American ends up spending no less than $1,389 annually. And all this is due to a sheer lack of knowledge of how to go about managing their hard-earned money. 

That is exactly where a financial advisor or planner drops in.

You are reading this because:

You are nearing a big decision in your life (wedding, buying a house, retirement) and still have no clue how to manage your finances.

You suck at savings and hence could use a professional hand to manage your money. 

You have started on your own, like a big job or a new business, and want to get things sorted right from the beginning.

Easier said than done, finding the right man for the job could be a tad bit difficult, especially when everyone is looking for the best. 

You see, the idea is to not just settle upon the “best financial planner” in town (don’t fall blindly for the swag alone) but to find that one guy who resonates with your goals, and can get things back on track with your money, and help you realize your long term objectives. 

Fret not!  We’ve got you covered. 

In this post, we mull over a handful of basics to consider when you are looking to find a financial plannerRead on!

1. Life and Finances go Hand-in-Hand 

Life and Finances

The very first step in finding the best financial advisor is to decide which particular aspect of your finances needs an expert’s touch. 

Invariably, this is going to be the very first question that your intended advisor is going to ask when you meet him for the very first time.

Know for sure that financial advising is not just planning your investments. Instead, you will come to know you have got the right guy when he proactively charts down a course for your finances on the table. From loan repayments,  insurance suggestions, and retirement planning — it’s a whole lot of process.

While comprehensive financial planning is mostly reserved for starters, mid-level and people in the last leg of their career might have different needs to cover. 

Usually, if you are someone with your own house and without any massive debt, you might not need anything else other than retirement planning. However, for individuals with complex needs, financial advice can be a mixed bag: 

  • Putting together college funds for kids 
  • Tax issues 
  • Debt repayments, especially the ones with an aggressive repayment schedule 
  • Vacation planning 
  • Saving for a dream home, and much more 

Know for sure that not all financial planners offer a similar range of services and thus, you will need to sort out things on the first go. 

2. Reputation Holds a Key for Sure 

Reputation

When it comes to finding the best financial planner, it’s always advised to check one’s credentials. 

However, not all credentials cut in. 

For financial advice that makes the most out of your money, you ought to be looking for individuals with a CFA (Chartered Financial Analyst) certificate. This is solely because CFAs are obligated to what you call the “fiduciary standard of care”, which means they will have to place a client’s interest on top of everything.

Also, what gives vitality to a CFA certification is the fact that one has to clear a professional exam to establish their proficiency and expertise and to maintain the designation further, the financial advisor, by all means, should adhere to ethical standards of work, thereby meeting the requirements of continued education. 

N.B. Besides CFA, a dependable financial planner can have any one of the following certifications: 

  • CFP (Certified Financial Planner)
  • CFS (Certified Fund Specialist )
  • ChFC (Chartered Financial Consultant)
  • CIMA (Certified Investment Management Analyst)

3. Knowing the Charges Right

Charges

Earlier, a typical financial planner was paid a small percentage of the total assets that he managed on behalf of his client. 

Today, it’s a different scenario altogether. 

Come-of-age financial planning experts cater to a varying range of services and accordingly charge their clients. Broadly, there are two ways to go about it; commission only and fee-based. 

While the former might seem the best option to consider, when it comes to payment, the percentage charged can be a significant sum of the investment made. These commission-based services work the same way as that of brokerages paid towards insurance advisors. 

In comparison, fee-based financial planners generally charge clients the total amount of assets they handle or manage. While some charge by the hour, others have different plans and packages to choose from. Some might as well ask a client to enter into a retainer agreement or get paid via a subscription model.

The average hourly charge by some of the best commission-based financial advisors is no less than $200, while a plan-based model witnesses payments in the range of $2000 and more. On the other end, a typical retainer agreement starts at $5000. 

There can be times when the payment method can be a combination. No matter what, one must put all terms and conditions on paper before they hire a financial advisor. Make sure the fee structure, rate (if charged hourly), as well commission payment schedules are all clearly mentioned in writing upfront so that you aren’t taken by surprise when the work is done and the invoice is raised.

Wrap Up 

Undeniably, planning finances is never an easy job. 

With rising ambiguity in the market, one can’t help but be a little bit more cautious, so as to ensure both immediate as well as long-term goals are being met. And that is exactly what adds to the essence of a seasoned financial planner. Simply put, the best financial advisor is the one who is a fiduciary, free from inhibitions or any conflict of interest in handling a client’s money, and can make the best move when the market is up for grabs. 

Have you ever hired a financial planner?

Was it worth the money spent? 

Let’s hang out in the comment section below and share your thoughts.