There are transitional times in everyone’s life that affect their financial situation. Getting married, having children, facing divorce, loss of a loved one, or moving into retirement age are key components in life that have the potential to affect financial situations. These are times when you may want to take advantage of a financial advisor to help make practical and prudent decisions. Click over here now E.A. Buck Financial Services – Denver Financial Planning
Choosing a financial advisor can be confusing. How do you make a final decision? Here are the keys to finding a financial advisor best suited to meet your needs and help you to meet your financial goals.
Key #1: Decide on Your Financial Goals
Prior to searching for a financial advisor consider what you want to accomplish with your money. Have a realistic figure in mind. Instead of simply saying that you’d like to be able to comfortably retire, have a number. This will help when choosing your financial advisor. He or she should be able to sit down with you and come up with a clear plan to reach your retirement income goals. Why should you have a clear number in mind? Think of it this way…What one person can comfortably retire on, may not work well for the next person. If you have a figure in mind, you’ll be much more likely to get a realistic answer from a potential financial advisor. If you are vague, your advisor may assume to understand your financial goals, but this leaves room for disappointment on your part. Clarity is best.
Key #2: Narrowing Down Your Choices
Instead of deciding on the first financial advisor you sit down with, talk to several. Narrow down your options by their qualifications and areas of specialty according to your needs. Divisions include:
General financial planning which includes creating a budget and a plan for meeting financial goals
Investment planners dealing with the stock market and asset management
Some financial advisors work with both types of planning
Key #3: Preparing for the Interview
Start out by asking your friends and family for recommendations. Once you have several referrals, make an appointment to interview each one. Check credentials and certification and ask for client testimonials from each financial advisor you are considering. Certification agencies such as the Securities and Exchange site for investment advisors or Financial Industry Regulatory Authority’s database for investment brokers are useful for checking qualifications. Schedule in a series of interviews and take notes during the process so that you can compare answers at a later time.
Key #4: The Questions to Ask
Compile a list of important questions before the interviews. Write them down so that you can record their answers. Important facts to cover are:
How are they compensated? If a financial advisor sells their products or services on commission, this may influence the advice they provide you with. They may create a general financial plan only to heavily douse it with products they are awarded a commission for.
Would they consider signing a document requiring that they put your interests ahead of their own? This is known as fiduciary duty.
If they are a fee-only planner then ask how fees are established. Do they work on a percentage of the managed assets or on a per-hour basis? If they work on a percentage, this amount should be around 1%.
Ask for references and an understanding of their background as a financial advisor. You should obtain a list of past and current clients to find a completely unbiased collection of opinions.
Are there additional fees involved that you should be aware of?
Remember, this is your financial future. It is important to research your options when looking for a financial advisor. Taking a proactive approach and educating yourself in the field of finances will help you make a clear decision.