Consider the circumstances for which you seek professional guidance. You visit a doctor for your health, turn to a lawyer for legal matters, and even call on a stylist for the perfect haircut. Your finances shouldn’t be any different. If you are like many people, you rank your finances as one of your top priorities, along with family and health. Something this important should warrant professional advice. Financial advisors can help clients identify the strengths and weaknesses of their current financial situation, recommend strategies, and provide some confidence.
A financial advisor who makes his/her client's best interests central to every recommendation will want to learn a lot about you and your situation before suggesting any investment products or strategies. When you visit your doctor, your lawyer, or your hair stylist, they will ask questions before doing anything. Your financial advisor should do the same.
Choosing a financial advisor is a major life decision that can determine your financial trajectory for years to come.
71% of U.S. adults admit their financial planning needs improvement. However, only 29% of Americans work with a financial advisor, according to a 2020 survey conducted by The Harris Poll.
The value of working with a financial advisor varies by person, and advisors are legally prohibited from promising returns. Still, research suggests people who work with a financial advisor feel more at ease about their finances and could end up with more money to spend in retirement.
Consider this example: A Vanguard study from Feb. 2019, ‘Putting a Value on Your Value’ found that on average, a hypothetical $500K investment would grow to over $3.4 million under the care of an advisor over 25 years, whereas the expected value from self-management would be $1.69 million, or 50% less. In other words, an advisor-managed portfolio would average 8% annualized growth over a 25-year period, compared to 5% from a self-managed portfolio.
While it’s tempting to hire the advisor closest to home or the first advisor on Google, this decision requires more time. Take the time to interview at least a few advisors before picking the best match for you.
Some financial advisors specialize in retirement planning, while others are best for business owners or those with a high net worth. Some might be best for young professionals starting a family. Before signing on the dotted line, be sure to understand an advisor’s strengths and weaknesses.
Each advisor has a unique strategy that should be tailored to you and your financial goals. To give investment advice, financial advisors are required to pass a test. Ask your advisor about their licenses, tests, and credentials. Financial advisors tests include Series 7, Series 66, or Series 65.
Some advisors are "fee-only" and charge you a flat rate no matter what. Others charge a percentage of your assets under management. Some advisors are paid commissions by mutual funds, a serious conflict of interest. If the advisor earns more by ignoring your best interests, do not hire them.
Investment Strategists at Better Banks specializes in personalized investment management and financial planning. We create, implement and monitor a written financial plan, as well as build a customized portfolio that best fits our client's needs. These needs can be quite diverse, as we work with individuals, families, business owners, retirement plan trustees, and nonprofits.
So you’re ready to get started? Great! Give us a call to speak with one of our team members.