A financial advisor helps you with your money-related decisions and guides you to invest your money to reach your financial goals. A financial advisor is perfect for those who want to get their finances on track, keep a record of them, diversify their investment portfolio, and meet their long-term financial goals. This article shares how to choose the right financial advisor. It also highlights a list of financial advisory firms you can check out.
Understand what financial services you need
Before going in for an appointment with a financial advisor, it is recommended to fully understand your financial needs and the department that can help you out. For instance, a young couple with no family or debt may look at estate planning, tax planning, or retirement planning, but those with families and their own house may need help with debt repayment, organizing funds for school and college, establishing trusts for children, and a retirement plan. Depending on your goals, your financial needs will be different, and so will the planning.
Know the different types of financial advisors
Financial advisors is an umbrella term for investment advisors, financial coaches, certified financial planners, financial therapists, and portfolio managers. It is easy to assume that the advisor who uses an official-sounding title has specific training and credentials related to what they do. However, quite a few “financial advisors” don’t have the credentials. So whom do you trust? Anyone who gives investment-related advice should be a registered investment advisor with either the country’s Securities and Exchange Commission or the state. This is based on their assets under management. It is essential to avail yourself of the services of a licensed, registered fiduciary, ideally one who gets paid directly by you and not through commissions for selling certain investment products. Certified financial advisors have a fiduciary duty, i.e., to work in their client’s best interests.
Look out for commission-based advisor
These are mostly everyone’s first choice, as they promote themselves as financial advisors who charge no fees. That doesn’t mean you can’t work with financial advisors who work on a commission basis; however, you must be extra careful when they try to sell you financial schemes. You will have to understand if the finance plan is suitable for you and your long- or short-term goals.
Know how much you can afford to pay an advisor
Financial advisors are notorious for their costly services. That said, there is always an option for every type of budget. It is vital to know how much a financial advisor charges before committing to their services. The amount of money you should pay a financial advisor depends on your budget, assets, and financial goals. An in-person advisor is not advisable if your short-term goals and a small portfolio. A robo-advisor can help you out if you have a diversified portfolio and a complicated financial situation. They charge a percentage of your account balance.
Top financial advisory firms
- BlackRock
This is one of the largest investment firms across the globe that operates in over 30 countries. The company made its name with its popular iShares funds, which you can check out on their portal for investment. This investment company offers the services of fiduciary financial investors who are known for the best financial advice in the industry. - Vanguard
Vanguard is another leading financial advisory firm that made its name in the industry through a huge variety of offerings that came at a reasonable rate. Simply put, the company thrives on low expense ratios on funds and passive investment management. This financial tactic of the firm makes its services accessible to almost everyone. - CAPTRUST
This financial advisory company offers asset management starting from as low as $50,000. It offers various services, including financial planning, pension consulting, risk management, portfolio management, retirement planning, and tax review. The company also helps its clients select other advisors.
