Many people feel stressed when thinking about their financial big picture. The number of investment choices can seem overwhelming. You may have considered retirement, planning your children’s college tuition or just trying to invest your money so it works for you.
Choosing a financial advisor (FA) who can help you navigate the best path to money success should be the first step on your journey. However, not all FAs are as skilled or match your personality and goals. Knowing which one to choose can drive you forward instead of setting you back.
When Do You Need a Financial Advisor?
People sometimes make the mistake of thinking they should be wealthy to seek the advice of an FA. However, the best time to seek a professional’s input is whenever you need to map your next steps or invest more wisely. Certain milestones can signal it is time to contact a money advice partner.
- Starting a new job
- Getting a raise
- Paying down debt
- Retirement planning
- Major life events like marriage, divorce or inheritance
- Investing for the first time
- Saving for education for yourself, children or grandchildren
You can always start making your cash work for you. An FA can assess your specific circumstances and align your goals with actions. Any time you stumble over the next steps is an excellent time to consult a professional.
How to Choose a Financial Advisor
Money management is a complex endeavor. You must figure out evolving federal tax laws and ones specific to Pennsylvania, pay attention to unstable markets, decide which investment options are in your comfort zone, and consider different life phases for long-term planning. A trusted professional can shoulder some of the stress and explain investment strategies.
1. Understand Your Goals and What Type of Advisor You Need
Before hiring someone to help, gain clarity on your financial goals. List the topics you need guidance on, such as retirement planning or an overall investment strategy. Since there are different types of FAs, having clarity on your needs can point you to the right person for the job.
Financial planners look at the big picture and create strategies related to savings, debt and insurance. Investment advisors manage portfolios and provide insight into the wisest places to put your money. Wealth managers work with high-net-worth individuals and offer advanced tax and estate planning advice. By understanding the specializations of each, you will be able to pinpoint the best type of professional for you.
2. Narrow Your Choices in Harrisburg, Pennsylvania
One way to prune your options is to utilize online tools like those at Fort Pitt Capital Group, with its advisor matching service. Instead of spending hours reading through various profiles and trying to find the best advisor in Harrisburg, you can use the free tool to narrow down your options and ensure only qualified advisors make the list.
3. Check Financial Advisor Qualifications
Once you have a list of potential FAs in your area, look for respected designations such as chartered financial analyst (CFA) or certified financial planner (CFP), which show the professional has completed a certain level of training and agreed to abide by organizational standards.
Use tools such as BrokerCheck to see employment history, certifications, licenses and potential violations. You can also identify violations through the SEC’s Investment Adviser Public Disclosure database and ensure the person has a current CFP or CFA designation.
4. Evaluate Experience and Expertise
Degrees and certifications only tell part of the story. You should also evaluate the person’s experience working with clients in a similar financial situation. If you need help with retirement planning, how many retirees has the advisor worked with? You can assess some of their skills by asking for references from their clients and looking at online reviews on Facebook and Google.
You could also contact the Better Business Bureau in Harrisburg, PA, and the Pennsylvania Office of Attorney General’s Bureau of Consumer Protection.
5. Consider the Advisor’s Approach and Philosophy
Most advisors list their philosophy on their website. Read through their bio and their description of what they do. Narrow your list to the ones that match your investment comfort zone. Do you want a conservative, long-term approach to investing or something aggressive? Determine your risk tolerance and ask the FA how they would approach investment decisions for a client like you.
6. Understand the Fee Structure
Before signing up with an FA, find out if they are commission-based, charge a flat rate or require a percentage of your managed assets. A few even use a hybrid model where they combine fees and commissions. The most transparent option is fee-only, because you know exactly what you will pay. However, the least expensive option could be a hybrid one. A commission-based approach ensures the FA has to work hard for you to earn their money, so they may perform slightly better.
7. Meet With Multiple Advisors
Gather your shortlist of names and interview FAs just as you would a job candidate. Schedule an introductory meeting with each one and utilize your time to ask what process they use to determine investing and how aggressive their model is. Pay attention to whether the advisor listens when you speak. Those who talk fast or use complex industry jargon may not hear your needs or be the best fit for you.
You should ask what aspects they cover or if another person in their firm can handle additional needs. If the FA only helps with retirement planning, is there someone in the office who covers education planning or budgeting?
8. Check References
If you collected references in the initial phase of narrowing your choices, now is the time to call them and talk to current or former clients about their experience with the FA. You could also reach out to a local friend if you notice they have left a review or followed the advisory firm on Facebook or another social media platform.
9. Trust Your Gut
You need someone you can connect with to get the most from your financial planning. The person has to be able to understand your vision and help you plan the milestones to make it happen. Some personalities mesh better with others.
Listen to your instincts, but consider more than personality when deciding. Which FA says things that resonate with you? Are they an active listener? Do you believe what they tell you? Finding someone you can trust and communicate well with is essential.
The Benefits of Working with a Financial Advisor
Knowing how to choose an FA requires time and due diligence. You might be tempted to figure out investing on your own. However, working with the right FA provides various advantages.
- A personalized plan that fits your life stage and goals
- Advice that comes from clarity and experience instead of emotions
- Experience in investment management and tax planning
- Accountability to ensure you stick with the plan long-term
- Support and quick pivots as your life changes
When you develop a relationship with a skilled FA, you gain peace of mind that your financial future will be positive.
Taking Your Next Steps Toward Financial Confidence
Although finding the perfect FA for you is about checking off some boxes, it is also about finding someone you trust and who listens to your needs. When you start your hunt by knowing your goals and understanding the type of advisor you need, you can save time using tools that narrow your options quickly.
Financial success means navigating a complex investing world filled with potholes and detours. The right advisor offers a roadmap that gives you the keys to achieving your dreams. Begin your search and get a head start on the journey.
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