A: Speaking from experience, the relationship between a financial advisor and his or her clients is incredibly important. Whether you rely on your advisor to help with retirement planning, saving for college, or meeting other goals, this individual will help determine how you approach some of life’s biggest financial decisions. That’s why it’s critical to ensure you’re working with the right person. Here are a few tips to keep in mind when choosing an advisor.
Find someone who cares about your goals for the future. Your financial advisor should ask questions about your hopes, dreams and concerns. Find someone who not only discusses important financial topics, but also listens and understands your needs. The individual should help you feel at ease and communicate clearly.
Select an advisor and a firm with a solid reputation. As you interview advisors, ask for references and specific examples that show how they helped clients like you reach their goals or weather difficult financial times. Also, check the advisor’s educational background and note any professional designations or industry accolades they have earned. You may find this information and more on their personal website, social media accounts and industry databases like Finra.org. It’s also important to consider what firm the advisor is affiliated with. Do they have years or decades of experience working with clients like you? Are they financially sound and reputable?
Understand how the advisor approaches financial planning. Steer clear from someone who offers a cookie-cutter approach to financial planning. Instead, look for an advisor who offers a disciplined, comprehensive and customizable approach. A good advisor should offer a tailored plan based on your goals — whether it’s building cash reserves, protecting your income against death or disability or creating a balanced portfolio.
You and your advisor should have compatible expectations about your relationship. Before agreeing to work with a professional, understand what his or her relationship with clients looks like. How often do they meet with clients like you? What would they expect from you at each meeting? How accessible are they between meetings? Make sure that the person you select is willing to work with you the way you want to interact with an advisor.
You should have a clear understanding of what you’re paying for. Advisors should provide information and materials to help you evaluate the benefits, risks and costs of the investments and services they offer, as well as the full range of options for the services you will be provided and account types you may select. If anything is unclear, make sure to ask questions.
Financial advisors should know how to tap into the expertise of others. A smart advisor knows when it’s time to gather input from other experts, such as tax and legal professionals. Find an advisor who is willing to use a team approach to help you reach your goals.
Once you choose an advisor you can team up to start customizing a financial plan that fits your unique needs. Selecting an advisor and creating a financial plan does take some time and effort, especially if working with a financial processional is new to you. Once you take action to achieve your goals, however, you’ll likely discover how life’s challenges can be better managed with the security of having a financial plan.
Christopher Zarra, CFP®, ChFC®, CFS®, is a Financial Advisor with Ameriprise Financial Services, Inc. in Rockville Centre, New York. He specializes in fee-based financial planning and asset management strategies and has been in practice for 22 years. To contact him, www.ChrisZarra.com, (516)764-0951, 119 N. Park Avenue, Suite 307, Rockville Centre, NY 11570.
Ameriprise Financial Services, Inc. Member FINRA and SIPC.
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