Find Financial Peace of Mind: Choosing a Financial Advisor

The Department of Labor finalized its new Retirement Security Rule this week, which has again thrust the definition and importance of the word “fiduciary” into the spotlight, with various financial industry organizations and associations either enthusiastically supportive or vehemently against the new rules.

At its core, the rule’s goal is to protect retirement savers from conflicts and recommendations that are not in their best interest. Rather than going down the rabbit hole of debating the importance of the f-word (fiduciary!), I thought a more comprehensive conversation about choosing a financial advisor would be more useful.

When picking a financial advisor, it is crucial to ensure you find someone who aligns with your financial goals and values. Not doing research can be a very costly mistake, so it is important to put in the time and effort to make sure you know who you’re trusting with your financial well-being.

Here are some steps you can take to help protect yourself and your retirement savings, and enjoy financial peace of mind with a trusted professional by your side.

Determine your needs: Before starting your search, identify your financial goals, whether it’s retirement planning, investment strategies, tax planning, or something else. Different financial advisors can provide a varying and wide-ranging number of services. An idea of what services you are looking for will help determine whether an advisor is a fit.

Check credentials: Look for advisors with relevant credentials such as the CERTIFIED FINANCIAL PLANNER™ (CFP®) or Chartered Financial Analyst® (CFA®) certifications. These designations indicate a certain level of expertise and commitment to ethical standards.

Regulatory compliance: Make sure the advisor is registered with the appropriate regulatory bodies. In the United States, for example, this would be the Securities and Exchange Commission (SEC) or the Financial Industry Regulatory Authority (FINRA).

Experience and track record: Evaluate the advisor’s experience in the industry and their track record of success. Ask for references from current or past clients. Speaking with others who have worked with the advisor can provide valuable insights into their communication style, responsiveness, and overall satisfaction with the services provided. Look for instances where the advisor has demonstrated their ability to help clients achieve their financial goals.

Fee structure: Understand how the advisor is compensated. Some charge a flat fee, while others work on commission or charge a percentage of assets under management. Make sure you’re comfortable with the fee structure and that it aligns with your budget and preferences.

Disclosure of conflicts of interest: Ensure the advisor discloses any potential conflicts of interest, such as receiving commissions for recommending certain products or services.

Interview potential advisors: Schedule meetings or phone calls with potential advisors to ask questions about their approach to financial planning, their investment philosophy, and how they would work with you to achieve your goals.

Check complaints and disciplinary history: Research any complaints or disciplinary actions against the advisor through regulatory databases or online resources. A common place to look is www.brokercheck.com. This will give you a better understanding of their professional conduct.

Trust your instincts: Ultimately, trust your instincts. Choose an advisor you feel comfortable with and who demonstrates integrity, transparency, and a genuine interest in helping you achieve your financial objectives.

By doing thorough research, you are much more likely to succeed in finding a financial advisor who is well-suited to meet your needs and can help you navigate your financial journey.

 

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Elizabeth Young, CFP®

As Partner and Senior Wealth Advisor, Elizabeth Young finds it gratifying whenever one of her clients reaches a long-held goal with her help and guidance. Those “aha” moments drive the work she does for our firm, including serving as the primary financial planning contact for clients and overseeing general client service.