In the pursuit of financial success there are certain milestones that one must reach in order to track progress and advance to the next level. En route to the next level we often need assistance in various areas, typically areas where we have little to no expertise. Even when we do have some working knowledge of a particular item, we often need to enlist the help of a more specialized and seasoned professional to expedite our journey.
In terms of achieving financial wealth, it will be extremely beneficial to you if you inquire, if not hire, a seasoned Financial Advisor. A Financial Advisor is a certified professional who provides investment advice and financial planning services to people like you, businesses, and also the government.
So why do you need a Financial Advisor?
Long-term financial success can be compared to the building of a bar stool. Can a sturdy and supportive bar stool carry and hold your weight if it only has one, two or even three legs? No! If you ever sat on a bar stool with less than three legs, than you know how unsteady and unnerving sitting in that chair can be! You can never seat comfortably because you know at some point either the stool is going to break or you are going to fall and hit the ground. Building a successful long-term financial is the same way. In order for you to retire, have money saved to support your lifestyle, and money to leave to the next generation, you need to build a portfolio with at least 4 legs to stand on. A Financial Advisor will help you maintain the perfect balance of investment income, capital gains, and acceptable levels of risk by utilizing proper asset allocation methods.
Some investment options for a typical portfolio include:
- Stocks and Bonds
- Mutual Funds
- Real Estate Investment Trusts
- Options and Futures
- Notes and Insurance Products
Simply put, a Financial Advisor will take the guess work out of planning for your future and recommend an investment strategy based on your own personal financial goals and aspirations. They have an ethical responsibility to see that a client’s risk is minimized, and monetarily, that money is maximized.
According to Entrepreneur.com, you should ask your Financial Advisor the Following 10 questions.
- How much experience do you have? Ask how long they have been doing their job and ask for references.
- What are your qualifications? Ask about industry recognized certifications and check to see if your advisor actually has them.
- What services do you offer? Ask about services and make sure your advisor is actually licensed to offer you financial advice in a particular area.
- What is your approach to financial planning? Make sure you and your FA see eye to eye. Your Financial Advisor must understand and implement their strategy according to your goals and level of comfortability. Remember they work for you!
- Will you be the only person working with me? If they work with others, ask for contact information and do thorough background checks. You want to make sure the attorneys, cpas, assistants and others they are working with are qualified to handle your money.
- How will I pay for your services? do they charge by the hour or by the month? Maybe they charge a percentage fee based on the amount of assets they are managing for you. Or, they may earn their commissions based on extra services they are able to sell you.
- How much do you typically charge? This should be a calculated estimate. It should also include all projected fees and commissions.
- Could anyone besides me benefit from your recommendations? You basically want to know if your Financial Advisor is affiliated with any third parties and whether or not they benefit from sending these third parties your business. If this is the case, they should disclose it. You should use more scrutiny when evaluating their investment advice.
- Have you ever been disciplined for any unlawful or unethical actions in your professional career? Do a background check on your Financial Advisor. Check out government and regulatory agencies like FINRA, the CFP Board, and the Securities and Exchange Commission for information on your FA.
- Can I have it in writing? Ask for the written agreement outlining their services and prices. Keep a copy for your own personal records.
Article by Kevin Breckenridge
Helping to raise the financial conscious of those who are consciously aware of the necessity to obtain financial freedom. Through education, exposure, open discussion, and action we can eliminate the financial strain on our pockets. Doing so will allow us to build the capital and asset portfolio necessary to truly enjoy our life as well as elevate the launching pad for our future generations. Follow me on Twitter @Legacieinmotion
Kevin has written 32 article(s) for us.
{ 3 comments… read them below or add one }
good stuff
I used to think that Financial Advisors were the way to go until I realized that their chances of increasing your wealth are the same as it is if I manage it myself . Main reason is that what you pay a financial advisor in management fees eats away at the bottom line greatly while that loss also compunds.
I have 2 words Index Funds you can diversify it yourself and expect an 8% return. As oppose to hoping for big stok market gains. Even Warren Buffet credits the invention of the Index as one of the great keys to steady increase. But to each his own.
http://www.ultimatemoneyfight.com
Two comments, one, the list of questions above is good, in addition, be sure to ask about the advisor’s experience working with other individuals in similar financial situations. Many advisors specialize in working with small business owners, retirees or other specific groups. Our firm http://www.claroconnect.com provides a free tool to screen advisors by location, qualifications, fees and more.
Second, another reply suggested investing on your own. Some people can develop a financial plan and follow it on their own, but not many. An advisor’s value isn’t in “beating the market”, it’s in working with you to craft a financial plan that reaches your goals and helping you stick to it.