6 Considerations When Choosing Your Financial Advisor

May 14, 2023

Finding the right wealth manager can make all the difference in your financial planning, which can help you achieve your goals. In fact, a good financial advisor can help you keep your savings, assets, and expenses in order.

This often results in peace of mind, freeing entrepreneurs, in particular, up to focus on what's important to you. That’s why we are presenting some things to consider when you decide it’s time to choose the right candidate.

This article answers the following:

  • How do you choose a financial advisor?
  • What should you look for in candidates?
  • Are there possible warning signs to avoid?
  • Could you come to regret rushing the process?
  • Are a couple of firms enough to choose from?
  • Why should fiduciaries be given special preference?

You Can’t Take This Decision Lightly

Your financial advisor is someone you'll trust with your money, your business planning, and your family's financial security. Finding someone with the right credentials and experience won't be enough; many other factors should also be considered.

In fact, the first thing you should look for is trustworthiness. If you select a fiduciary, you should be able to expect exemplary moral conduct toward your property and yourself. However, you also need someone you can trust to be straightforward about managing your assets.

Trustworthy communication skills are essential since your financial health depends on having an advisor who can guide you through difficult decisions. These often include considerations of how much risk is appropriate in your portfolio or when to invest money into an IRA.

A reputable financial advisor will take their time explaining the pros and cons of different options to you. That’s because they want you to make informed choices about how best to use your resources without feeling pressured (by them or anyone else involved in the process, such as an investment firm).

They must be reliable, someone who will always answer questions promptly and never miss appointments. Similarly, they must be accountable; someone who explains everything clearly enough so that even novice investors can understand what's happening in their accounts.

Someone who leaves you feeling overwhelmed or confused by jargon-filled language is probably not your ideal candidate. Conversely, a worthwhile investment advisor will help you keep your finances in order so that you have peace of mind to relax and do what you do best.

For example, let’s say you're a small business owner who is constantly on the go: Having someone who works with you to make sure that the books are balanced each month is a clear benefit, but there’s more to it than this. A proper wealth manager could include keeping an eye out for invoices that will soon be due or helping ensure that bills are paid on time.

At the same time, a good financial advisor will also help those who may not know much about investing or managing money learn how to do both better. These are the kinds of advantages many clients benefit from when they're starting out in their careers.

Now that we’ve reviewed a few benefits let’s get to the considerations before selecting the right financial advisor to ally with.

1. Consider Your Needs

It is essential that you consider what kind of services and advice you need (and may in the future). For instance, if you have specific retirement savings or tax planning goals, look for a financial planner who specializes in those areas.

However, an investment broker could be a better fit if your goal is simply to save money and invest without an overall plan. Regardless of which type of advisor is right for you, several questions should be answered before deciding on one:

  • What kind of services do I need?
  • What are my goals?
  • Do I have time constraints (in terms of hours per week or month)?
  • How financially constrained am I (e.g., how much can I afford monthly)?

2. Ask Family and Friends for Recommendations

Sometimes, some of the best discoveries can be made simply by asking around. Your loved ones are likely to give you the names of financial advisors they have worked well with in the past. This can help ensure that their recommendation is trustworthy since they have firsthand experience with the wealth manager’s work ethic and trustworthiness.

3. Do Your Research

Researching any potential financial advisor is a must. So, make sure that you do your homework by asking the right questions. This is the only way you can find the best fit for you and your family.

If you aren’t sure where to begin, look at their website. Does it appear professional? Is it clean, easy to read, and accessible? Is it up-to-date with current tax information? These factors are more important than they sound: They can suggest how much effort a firm puts into their business (and how well they communicate with clients).

Next, check out their LinkedIn profile. This may provide insight into what other people think about them and any educational background or certifications they hold. Look for finance-related areas of experience, such as taxation or investment management. Have they won any awards in these areas?

4. Meet With Several Advisors Before Making a Final Decision

Finding your financial advisor can be a daunting task. Nevertheless, there are multiple aspects to making the right decision. Each advisor will have their own style and approach, so it is important to take your time during the selection process.

Meeting with several advisors before making a final decision will give you the opportunity to get a wider view of your options. Be sure to ask about each contender’s background, experience, investment philosophy, fees charged, and more.

5. Make Sure They Are Registered With the SEC or FINRA

Never consider hiring a financial advisor without making certain that they are registered with the Securities and Exchange Commission (SEC) or the Financial Industry Regulatory Authority (FINRA). They also need to be licensed in your state and must be able to show proof of their degree(s) and certifications.

Fiduciaries should be given preference: they are legally required to act as an unbiased third party for you by providing advice based on your best interests, not those of anyone receiving commissions from transactions. Lastly, fiduciaries must pass an exam approved by FINRA before becoming registered.

6. Review Their Fee Schedule & Make Sure You’re Comfortable With It

Another important thing to do when choosing a financial advisor is to review their fee schedule. You have to ensure you're comfortable with how much they'll charge you. If you don’t understand their fee structure, ask them to explain it in detail (and get them to give an example of what they would charge you for a particular service).

Finally, as part of your initial interview process, ask if any other fees might apply to either of you during the course of working together. Some advisors, for instance, may charge additional hourly fees depending on what services are involved on top of their basic planning fees.

The Sum Total

The key to finding financial planning business owners can rely on is to do your research and ask the right questions. It's important that you feel comfortable—and work well—with this person, so make sure that you take your time before making a final decision.

Ironclad Wealth Management specializes in financial planning entrepreneurs, and their businesses can grow. Contact us today to learn more.

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MGO One Seven LLC ("MGO One Seven") is a registered investment adviser with the U.S. Securities and Exchange Commission (SEC). Registration with the SEC does not imply a certain level of skill or training. All titles listed for individuals associated with Ironclad Wealth Management represent the individual's role with Ironclad Wealth Management, and not their role with MGO One Seven. Services are provided under the name Ironclad Wealth Management, a DBA of MGO One Seven. Investment products are not FDIC insured, offer no bank guarantee, and may lose value. Please visit our website www.WeAreOneSeven.com for important disclosures.

Please note, the information provided in this presentation is for informational purposes only and investors should determine for themselves whether a particular service or product is suitable for their investment needs. Please refer to the disclosure and offering documents for further information concerning specific products or services.

Nothing provided in this presentation constitutes tax advice. Individuals should seek the advice of their own tax advisor for specific information regarding tax consequences of investments. Investments in securities entail risk and are not suitable for all investors. This site is not a recommendation nor an offer to sell (or solicitation of an offer to buy) securities in the United States or in any other jurisdiction.

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