6 Tips When Hiring a Financial Advisor

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Financial health must factor into everyone’s priorities. Just as you focus on your personal life, intellectual pursuit, or creative passions, you must also devote enough mental bandwidth to money matters. After all, if you lack sufficient funds, you won’t be able to buy a nice wardrobe, pay for grad school, or purchase a piano to jumpstart your goal of becoming the next musical genius.

It might be clever to hire a financial advisor to start taking your finances seriously. A financial advisor can help you create a viable plan for your finances to secure your financial future. Whether you have yet to amass assets or want to diversify your financial portfolio, a financial advisor’s services can be valuable in achieving short and long-term goals.

If you’re ready to work with a financial advisor, here are 6 tips when hiring a financial advisor:

Check Credentials

You’re the boss hiring an expert to work for you. It’s in your best interest to check your prospect’s credentials. The last thing you want to happen is to devote a year or two to a relationship with a financial advisor that you would later unmask as a fraud. That mistake could be costly.

The bare minimum requirements to look for in a financial advisor would be a certified public accountant (CPA), certified financial planner (CFP), or chartered financial analyst (CFA) designation. Meanwhile, if you’re hiring a firm, ensure that their roster of professionals holds any of these backgrounds.

Follow Your Gut

There’s no shortage of highly qualified financial advisors. Chances are you’ll meet candidates with similar exemplary credentials. In that case, narrow your options by following your gut. By gut, we mean looking for a personal fit. Here, you can consider factors outside those directly related to the profession.

Do you feel you share the same values as the candidate you’re considering? Are you more or less on the same page politics-wise? Do you like how they look, think, or speak? The personal fit could cover lots of barometers. Choose yours wisely.

Favor Fiduciary Standard

Workers in the financial industry could subscribe to either of two standards: suitability and fiduciary.

Under the suitability standard, a financial advisor might suggest what they think suits your needs based on the information you disclose.

Meanwhile, a financial advisor committed to fiduciary standards will go out of their way to offer you the best option after hearing what you have to say. That is even if that option is beyond their scope of clout. The latter puts you first. It’s what you must look for.

Demand Transparency

You will be hiring someone to take charge of your finances. That person will know the ins and outs of your assets. It follows to demand transparency from this working relationship, given your money is on the line.

Transparency begins with the disclosure of all fees relevant to the partnership. A financial advisor should inform you how much you’ll spend on their services. They should also explain to you all the services they will be doing on your behalf during the partnership.

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Gauge Communication Skills

This area is a crucial consideration. You do not want to work with a financial advisor who mumbles their way throughout a meeting. A financial advisor worth their salt is an excellent communicator—that means being able to explain otherwise technical subjects sans the jargon. If a financial advisor can’t discuss mutual funds in layperson’s terms, you might be better off looking for another candidate.

Also, make it clear how much access you have to your financial advisor from the get-go. Will they be able to answer your calls 24/7? If not, what’s the schedule, and would you be amenable to it?

Lastly, ask for any educational opportunities your financial advisor might be able to furnish you as a client.

Change Ready

Some financial advisors might not have sufficient experience handling their clients’ life changes. That might directly impact priorities. Consider the scenario of early retirement. Your hired financial advisor should be savvy enough to guide you through this transition. The same goes if you’re planning to get married or divorced.

Wrapping It Up

It isn’t easy to earn money, but easy to spend it. Those are facts of life with which a financial advisor might help. An excellent financial advisor can help determine ways to maximize your earning opportunities. They can also guide you in managing expenses in a way that does not compromise your financial future. With a financial advisor on your side, you’ll be well on your way to achieving financial health.

Financial health is just as crucial as physiological and mental health. Remember that if your finances are not in order, the stress that burden brings is enough to wreak havoc on your mind and body. So keep money matters A-OK and keep these 6 tips when hiring a financial advisor in mind.

I’m Kendall Regand, and I’m the Client Service Manager of Valiant Partners. I work behind-the-scenes keeping every step of our client service process running smoothly.