Whether you want help putting together a budget, investing for retirement or managing your finances, financial advisors can provide guidance and expertise. But with all the different types of advisors out there, finding the right one can be daunting. Thankfully, there are several ways to narrow down your options and feel confident in your selection.
First, determine why you need a financial advisor. Are you trying to save for a child’s education, managing your finances during a divorce or getting ready for retirement? Whatever your goals, there’s likely an advisor who specializes in your situation. It can also be helpful to find out if an advisor has any other clients in your situation. Say you’re in your 40s and recently divorced — does this advisor have experience working with divorcing clients?
Next, be sure to understand how an advisor halifax financial advisors makes money. Some charge a commission on their products and services, while others may receive an annual percentage of a client’s assets or charge an hourly rate. While this isn’t necessarily a deal-breaker, it’s important to know how an advisor earns his or her money so you can assess whether the relationship is a good fit.
In addition to ensuring you understand how an advisor works, you should also make sure he or she is a fiduciary. Fiduciaries are legally required to put your best interests before their own or those of their firm. This includes not charging you excessive fees, steering you toward investments that don’t suit your needs or recommending products with high fees or expenses. A fiduciary financial advisor will also be transparent about how he or she is compensated and disclose any conflicts of interest.
Once you’ve settled on an advisor, make sure to communicate effectively with him or her. This means sharing your short- and long-term goals, existing investments, tolerance for risk and any other relevant information. Then, work with your advisor to create a plan and implement it. This will help you stay disciplined during market swings and stick to your long-term strategy rather than making rash decisions in reaction to market changes.
If you’re not sure how to choose a financial advisor, start by asking family and friends for recommendations. Or, try a service like SmartAsset’s free financial advisor matching tool. Just be sure to hire an advisor who is a CFP and a fiduciary, as this will ensure that they’re legally required to put your best interests first. Otherwise, you could end up with an advisor who simply sells you investments that pay him or her commissions. That’s not what you want!