Regardless if you already have a financial planner or advisor, or you’re now searching for one, you have to always prioritize your best financial interest through the help of a professional. Why do people need a financial advisor? Unlike a salesperson who promotes products, a financial advisor is an expert in giving consultancy services to help their clients achieve their short-term and long-term financial goals except for brokers. Aside from making your financial advisor swear or sign a contract that he’ll be working in your best interest, what are the important considerations when choosing the right financial advisor for you?
Do financial advisors have a specialization? The different types of financial advisors include brokers, investment advisors, and financial planners. Investment advisors give advice on securities including stocks, mutual funds, and bonds. The different terms used referring to investment advisors include “wealth manager”, “wealth advisor”, “portfolio manager”, “investment manager”, and “asset manager”. When it comes to buying and selling, brokers are involved. Brokers are also commonly known as stockbrokers, wealth managers, financial consultants, financial advisors, and investment consultants.
On the other hand, financial planners manage and look on the overall financial aspect of their clients such as real estate, tax planning, retirement, insurance needs, and debt management so they can establish an effective and long-term financial plan. How would you choose a financial planner? A financial planner provides investment advice like RIA which can be subjected to fiduciaries or they can be brokers who sell products. As defined by the CFP Board, a certificant should always put the best interest of the client ahead of his own interest because the certificant owes a duty of care as to a fiduciary.
Make sure to look for a Certified Financial Planner or CFP. Their pay depends on a commission basis rather than flat or hourly rate. Always review the code of ethics your financial advisor adheres to. When you are looking for a financial advisor or you are evaluating a current one, it is important to ask this question, “Are you a fee-only financial planner who acts as a fiduciary one hundred percent of the time?”. Financial advisors who are fee-based might just sell you products instead of acting as your fiduciary.
Once you selected a financial advisor you prefer, get everything in writing, indicating that the one your hire is a fee-only advisor who will act as a financial fiduciary one hundred percent of the time, and will fully disclose or tell you any conflicts of interest. The term “fee-only” eliminates the possibility for the financial advisor selling you products because if he is a fiduciary, he will always give you an expert advice in your best interest. If you want to know more about fiduciary financial planning, feel free to check our homepage or website to achieve your financial goals.