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7 Questions to Help You Find the Right Financial Advisor

A financial advisor can help you make many important decisions, from how to pay off debt or save for a major purchase to how to plan for your children's education or invest for your own retirement.

Before choosing a financial advisor, you should ask two sets of questions: one set for yourself, the other for the advisor you may want to hire.

Here are seven questions you may want to consider:

Questions to ask yourself:

  1. What types of financial advice do I need?
    In addition to budgeting, saving, and investing, financial advisors can also help you come up with strategies for life insurance, long-term care, income tax management, and estate or inheritance issues, among many other financial matters. Knowing what type of help you need is the first step to finding someone to advise you. Not sure what you need? An advisor can help you figure that out, too.


  3. Do I want to meet with my financial advisor in person, or would an automated investment service meet my needs?

    Human financial advisors are live people who can meet with you in person, by phone, or online to discuss your situation and give you advice. Automated services, sometimes called robo-advisors, rely on computer algorithms to make investments. If you want personalized advice or you'd prefer to select investments other than index or exchange-traded funds, a human advisor may be your best option.


  4. How much money do I have available to invest?
  5. If you're seeking investment advice, you should keep in mind that some advisors have minimums for assets that they manage. These minimums can range from $50,000 to $500,000 or more. One reason for these minimums is that your advisor's fee may be based on a percentage of your assets under management (AUM). On this basis, smaller accounts generate lower fees. Advisors who charge flat fees or hourly rates may be less likely to have minimums for AUM.

Questions to ask the financial advisor:

  1. What types of financial advice do you offer?

    Many financial advisors offer a wide range of different types of financial management services. Others focus on specific areas, such as retirement planning, estate/inheritance matters, or investment strategies and recommendations for their clients. If you need multiple types of services, an advisor who's a generalist might be a good fit for you. If, on the other hand, you want to focus only on a specific area of your financial life, a specialist might be a smart choice. A third option is to choose a specialist who has close professional relationships with other advisors who leverage their skills to offer their clients a team approach to financial services.

  2. Who's your ideal client?

    Some advisors are open to all types of clients, regardless of their life experiences. Others dedicate themselves to specific groups of people, such as young families, military veterans, business owners, or high-net-worth individuals. Advisors may choose to work with a specific group because they have personal experiences or connections within that group, or they especially enjoy working with people who've had that type of life experience. While you don't have to choose an advisor with whom you share an affinity-group connection, knowing what types of clients an advisor prefers to work with may help you make your choice. The "ideal client" question could be especially important if you need a lot of help with a technical subject, such as veterans' benefits, small-business succession planning, or charitable donor investment accounts.

  3. When do you act as a fiduciary?

    A fiduciary is someone who has a legal obligation to act in someone else's best interest rather than their own. Some advisors always act as fiduciaries; others never act as fiduciaries, and still others may act as fiduciaries some of the time, but not always. This issue is important and can be complex, so it's best to ask your advisor upfront for details about the standards that will apply.

  4. How are you paid?

    Financial advisors use a variety of fee structures. Some charge hourly rates. Others are paid an annual retainer, a percentage of your AUM, or a commission based on the investments you choose to buy. Robo-advisors are generally more affordable, but again, they don't offer personalized advice.

While there's no one best fee structure for every financial advisor or client, you should ask your advisor to explain the fees you'll be charged before you engage them, so you won't be surprised later on.

Choosing a financial advisor may take some time and thought, but the process can be well worth the effort when you need to make important decisions about your personal finances. The right advisor could help you save money, build wealth, and enjoy peace of mind about your financial situation.


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