How to Find a Financial Advisor

If you need help managing your money, there’s no shame in seeking a financial advisor who can offer guidance, assistance, and strategic planning. Not knowing how to manage your money and take advantage of investments and tax credits can cost you both in the short and long term. Finding a financial advisor can not only help you avoid costs but also focus on goals for growth.

Financial advisors aren’t just for the wealthy and elite. They’re valuable assets for everyone interested in managing their money and planning for their future. So how do you find the right financial advisor? Here are some tips to help you start your search.

#1 Start by Figuring Out Where You Need Help

If you’re wondering how to find a financial advisor, your first step should be to consider the type of help you need. For example, financial advisors can help you figure out how to get out of debt, set up retirement plans, plan for your estate when you pass, or set up a retirement strategy. However, some financial advisors only offer specific services, such as investment management. So if you need help figuring out a budget and managing your income, an investment management-only advisor won’t be your best match.

Depending on your life circumstances, you may not need the full-spectrum services offered through comprehensive financial planning. Many people have relatively uncomplicated financial lives, like young adults without significant debt or families. Retirement planning may be the only service these individuals need, at least at present.

However, you may need specialized assistance if you have a complex financial situation. For example, perhaps you want to figure out how to establish a college fund for your kids, solve tricky tax issues, or navigate a significant debt payment solution.

To make your search easier, figure out precisely what you need help with and let that be your guiding light.

#2 Understand the Many Types of Financial Advisors

Not all financial advisors are created equal.

Some people operate financial advising businesses without credentials or legal or ethical constraints that prompt them to keep their clients’ best interests in mind. Therefore, it helps your search to understand the different types of financial advisors. Armed with this information, you can confidently make a prudent decision about who will be managing your money.

Some financial advisors are fiduciaries or professionals who are legally bound to make decisions in the best interests of their clients. This is a different status from advisors who uphold a suitability standard, which means they might suggest specific products or investments even if they’re more expensive. When interviewing a prospective financial advisor, you should start by asking a few simple questions, including:

  • What services do you offer?
  • Are you a fiduciary?
  • How do you get paid?

Knowing how the professional is paid will give you an understanding of the type of advisor they are. Generally, advisors will either be fee-based, commission-based, or AUM-based.

Fee-Based Advisors

Fee-based advisors are advising professionals who charge retainer fees for their services. These fees may be annual, monthly, or per service. Fee-based advisors are often fiduciaries.

Commission-Based Advisors

Commission-based advisors aren’t fiduciaries. Instead, they’re essentially salespeople who often recommend products to clients based on the commission payout for themselves. Of course, not all commissions are inherently wrong. For example, some financial products, like life insurance, are sold only under commission models. That said, you’ll want to exercise caution when approaching a commission-based plan to protect yourself and your money.

AUM Advisors

These advisors charge a percentage of your annual portfolio. The rates typically range from 0.25% to 1%. So, for example, if you have an account with $100,000, the advisor will earn $1,000 per year. AUM advisors can be (but aren’t always) fiduciaries.

#3 Choose Your Advisor Based on the Services You Want

While services vary from advisor to advisor, financial advisors can offer a wide range of services to benefit you and your finances, including:

Determine which services you’ll likely want to avail yourself of throughout your relationship with your financial advisor, then choose accordingly.

Discover the Good Life

We hope you enjoyed this blog on how to find a financial advisor! If you are a resident of Charleston, SC, our friendly and professional team at Good Life Financial Advisors of Mt. Pleasant is here to help!

Learn more about our services and the fees by contacting us today for a free discovery call. During our conversation, we’ll get to know your financial situation and outline how we can help. Contact us today to get started!

The opinions voiced are for general information only and are not intended to provide specific advice or recommendations for any individual.