How to Hire a Financial Advisor: 6 Things to Understand and Consider

how to hire a financial advisor you can trust

As a leading team of financial advisors, Firma Financial Planning has a lot to teach you about fiscal responsibility, and they would love to work with you on achieving your financial goals. This partnership is a large part of what makes them different from other so-called advisors. They have established a firm built on the principle of fiduciary practices, meaning that they look out for your needs above their own. However, as it can be difficult to know which companies to trust when it comes to your money, there are at least six things you should know about how to hire a financial advisor.

  1. Know the Difference Between Brokers and Planners

There are so many terms flying around when it comes to the financial industry, which is why it is easy to understand how the terms brokers and planners can be used interchangeably even though they are entirely different roles. A financial broker is an individual that specializes in one aspect of your finances. For instance, they could be assigned to monitor your investment portfolio. A financial planner is more involved in every financial decision you make. Planners want to know the ins and outs of every major financial decision, like taxes, investments, estate planning and insurance. If you are looking for an individual to manage your entire financial picture, then a planner is who you are looking for.

  1. Select an Advisor that is Fiduciary

While finding a financial advisor – a planner not a broker – is a good decision, you want to pay attention to the title. The term advisor is a blanket term anymore and does not distinguish the type of finance professional you are dealing with. A fiduciary, however, is bound to a specific set of ethical standards and puts the client first, always. Most fiduciary planners work on a fee-only structure, meaning that you pay for particular services and they do not earn commission or interests off the investments.

  1. Do Your Research

Recommended financial advisors can be found in any number of ways. You can scour the internet for review sites and advertisements, or you can seek out advice from someone you know and trust. The best option is likely a combination of the two. Additionally, you can research licensing and any compliance infractions. This combination of internet and personal research will typically result in a list of potential financial planners.

  1. Be Clear About Fees and Services

Similar to ensuring fiduciary compliance, you will want to be clear about fees and services. It is true that a good financial planner may cost a little more than expected, but this can be a sound investment if they are committed to your financial health and their personal gain does not motivate it. There should be some separation between your financial success and the fees of your planner.

  1. Have Realistic Expectations

Financial investments are not a guarantee. Sure, there are savings accounts with guaranteed returns, but most investments present a risk and outcomes cannot be predicted. Therefore, while the goal of a 10 percent return is a nice dream, the reality will likely be lower. Dreams are wonderful, but when it comes to finance, you have to rely on numbers and lowering expectations. Be realistic in your financial goals and trust your advisor.

  1. Seek an Expert, Not a Friend

While it is nice to work with people who share personality characteristics, or who mesh well with your demeanor, it is not necessary for your fiscal health. A financial planner does not have to be your friend, and they certainly don’t have to be friendly. The important thing is that they are qualified and that they work in a way that secures your financial interests. You want an expert, not a new best bud.

If you’re looking for some of the best financial advisors in Michigan, look no further than Firma Financial Planning. Call 1-586-588-9264 and see what they can do for you.

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