What To Look For In A Financial Advisor

Choosing the right financial advisor is an important decision when it comes to planning your future. After all, this person will play a key role in how you invest and save so that you can achieve your financial goals leading up to retirement and possibly beyond.

But despite how important an advisor is, people may have trouble determining just how to choose a sound and competent advisor.

Below, we’ll offer tips that can help you choose the right financial advisor and one that can help you reach your goals.

Determine Your Own Financial Goals

This may seem obvious, but you have to know your own goals before looking to hire someone to reach those goals. Although a financial advisor can help you even if you have no clue about investing or financial planning, you should have some goals or at least aspirations in mind.

These can be things like saving for a child’s college or setting up money to start a small business. Whatever it is for you, make sure to know what you want so you can communicate these needs to your advisor.

Past And Proven Experience

One thing to look for in a financial advisor is experience. This needs to be not only time as an advisor but also past success that can be proven.

This can be in the form of awards from various industry associations or publications. This can also be a number of past clients who have had great success with this specific advisor.

Check Credentials

Credentials may not ensure someone is the best at what they do, but they do show you they at least have a level of competence as recognized by peers in the industry.

Common credentials in the financial industry are either a chartered financial analyst (CFA) or certified financial planner (CFP).

These require a level of study and then for a CFA, it also requires that the advisor pass an extensive exam. Advisors with these credentials also abide by a certain code of ethics as outlined by the CFA Institute and CFP board.

Understand How The Advisor Earns Their Money

This is important and even if an advisor is required to keep your best interest at the forefront when making suggestions, understanding how they get paid is an extra layer of protection.

You’ll want to know if they earn a commission based on the investment products they sell. This doesn’t necessarily mean they can’t give good advice, but it can create a conflict of interest.

This is especially true if the person is purporting to be an advisor but does not have the credentials. In these cases, these people are operating as salesmen more than advisors. Once again, this can be fine if you know exactly what you are purchasing. 

But for those who seek objectivity, this is generally not a good scenario and may be cause for you to look elsewhere for advice.

Choose An Advisor That Fits Your Needs

Everyone has different needs. Not just financial needs, but also personal needs when it comes to investing and dealing with the different emotions tied to saving and investing.

Do you need someone who keeps you on track? Are you someone who has trouble keeping up with savings or contributions? In this case, maybe you want an advisor who offers more communication to help you along the way.

There’s nothing wrong if you need a little more from an advisor. Not just to stay on track, but maybe to understand various investment strategies or just to talk out long-term plans.

If you need these extra services, make sure your advisor is comfortable with this and can provide the type of communication to help you stay motivated, informed, and on track.

ICCNV is an award-winning financial advisor located in Nevada. Both the Wall Street Journal and Barron’s have recognized them as the #1 financial advisor in Nevada for 8 consecutive years.