What Makes a Good Financial Advisor?

Are you sick of feeling out of control with your finances? Do you want to see more returns than the tiny amount of interest you earn from bank accounts? Tired of the cookie-cutter financial advice you’ve been getting? The truth is that wealth management is personal. Whether you have a little or a lot, having a financial plan is vital for several reasons:

  • Grow your investments
  • Prepare for retirement
  • Protect your assets
  • Tax planning
  • Ensure your loved ones are looked after

Although wealth has been rising steadily for the last 10 years, just 29 percent of people say they work with a financial advisor to guard and grow that wealth. Many individuals wrongfully believe that they need to have a large amount of wealth or investments before hiring a financial advisor. But that’s not the case. A good financial consultant will look at your income, assets, and investments. They will identify your financial strengths and weaknesses. Together, you can set goals to get you on track. In this piece, we’ll show you what qualities you need to look for in a financial advisor and what to avoid so that you can create the best financial plan for your future.

Things to Look for When Choosing a Financial Advisor

You don’t need to hire the first financial advisor you meet. Instead, do some research and shop around. After all, we’re talking about protecting and planning for your assets and your family. You want to be confident you’ve made the right choice. While you look around, here are some qualities to watch for in a financial advisor.

1. Transparency

A good financial advisor has a clear process in how they invest and make financial plans. You’ll recognize them by their ability to articulate what that process is in a way you can understand. Remember that you’re trusting this person with your money, and you don’t want to make that move lightly. Be sure that you know the process that your financial
advisor is proposing. Don’t be afraid to ask questions to gain clarity. For example, there are different approaches to paying down your debt. Ensure that you know which debt payoff method is right for you.

2. Motivation

The motives of a financial advisor will become clear if they try and sell you things you haven’t asked for, such as an insurance product. Unfortunately, some people who call themselves financial advisors do not have your best interests in mind, but rather the company they work for or get a commission from, such as a bank. If you find an advisor trying to push products you don’t want, walk away.

3. Listener

You know you’ve got a good financial advisor when they listen to your needs and understand how you view money and what it means to you. Research has found that advisors know the importance of good communication skills. In a recent survey, 58 percent of advisors said regular communication was crucial to their success. Sixty-four percent acknowledged that clients leave because they don’t feel their advisor is listening. A worthwhile advisor will also ask key questions that may get you to think a little deeper about your values and financial goals.

4. Reasonable Fees

Too many advisors will say “it costs what it costs” for their services. That’s not good enough. It’s best if you work with someone who can explain their fees clearly, upfront. While some rates may seem high, keep in mind that working with an advisor who charges fees is one way to protect yourself from financial advisors with a conflict of interest. Advisors who work on a commission basis may be less expensive, but they are also looking out for the companies that pay them.

5. Goal-setters

One of the main reasons to have a financial advisor is to set and attain goals for your wealth. Good advisors will help you do this. Look for an advisor who seeks to develop a comprehensive understanding of your financial situation. It’s only by knowing how you spend money, the debt you have, and your life goals that a financial advisor can build a meaningful strategy and plans to get you where you want to be. For example, there are different key factors you’ll need to consider when setting a retirement goal. An advisor who works with you on goal setting is a keeper.

Protecting and growing your wealth, setting financial goals, and planning for your future are all ways that advisors can help. If you’re looking for a good financial advisor, schedule a meeting with one at IronOak Wealth today.

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