How to Find the Right Financial Advisor for You – Choose Wisely!

Pritam Nagrale

Updated on:

financial advisor

So you have no clue about how to get rich? Don’t worry- you aren’t alone. That’s why it’s important to find a financial advisor that is right for you.

What does a financial advisor do? A right financial advisor can help you save, invest, grow your money and plan retirement too.

financial advisor

And it doesn’t really matter whether you’re investing a little money or millions; a financial advisor is useful for anyone that wants to get rich.

That brings us to the question, how to find the right financial advisor?  Worry not. In this article, I will guide you in steps on finding an excellent financial advisor who could help achieve your financial goals.

Finding the Right Financial Advisor

Finding the right financial advisor can be a bit tricky. Because it depends upon what money goals you want to achieve over the next few years. Therefore, follow these simple steps to select the right financial advisor that suits your specific needs.

Step-1: Do I Need A Financial Advisor?

That’s a question you need to answer. Generally, the first response would be a big no. That’s because of several reasons. We falsely believe that financial advisors are only for rich folks.

Secondly, we think about not having enough money to invest. And thirdly, we also think that savings schemes, cumulative deposits, a retirement plan, and insurance would amply cover our financial needs.

That’s not always the case. Millions of people that depend upon such traditional forms of savings are not always sufficient in later years.

Inflation leading to higher living costs negates any interest you would earn from these forms of savings and investments. Savings that appear respectable and large today usually seem pathetic and small in about 10 years.

Surely, you would like to avoid such situations. Since our knowledge about money and investment schemes is usually limited, choosing a financial advisor would be a wise decision.

They can guide on how and where to put the hard earned money to get the highest returns.

Step-2: Count Your Money

Yes, that’s right. Count your money including every penny and dime you have stashed away anywhere. Make a list of how much you earn and where the money goes.

How much money lies in your bank accounts and what investments you have, including government and employee sponsored plans you might be subscribing.

While a financial advisor would definitely want to know how much money you have and help find ways and means to invest it.

Don’t feel shy if your savings aren’t really that much as you’d expect. There’s always ways and means to boost your savings by following some simple tricks and tweaks.

If you don’t earn much but wish to invest, a financial advisor can also help. The first thing is downloading an excellent budgeting app on your smartphone.

This will help know where your money goes and why. Using such an app also shows where you can possibly reduce expenses and save a lot of money.

Step-3: What’s Your Dream?

Everyone has different financial dreams. Or, financial objectives and goals. Someone wants to retire early while others want to get out of debt.

Yet others wish to have that luxurious lifestyle while some need money for higher education for kids. Be clear about your dreams and goals because a financial advisor can help you fulfill those to a great extent.

It’s perfectly normal to have more than one financial goal: we all have. To fulfill this, we need money. Most of us would think that our money is not enough to reach those financial goals. Let me tell you- that’s incorrect.

Put down your financial dreams on paper. Think about where you’d love to be after five or 10 years. List them according to your priorities.

This list will help a financial planner to draw perfect savings and investment plans to achieve your goals.

Step-4: Understanding Types of Financial Advisor

After making this list of your financial dreams, the next step obviously is to understand what is a financial advisor and their job.

Here’s where all the above steps will matter. Broadly, there are three types of financial advisors everywhere in the world.

The first category is financial advisors that banks and credit unions, as well as Non-Banking Financial Companies (NBFCs), provide free of cost to their customers.

The second category is financial advisors who operate on behalf of several banks and financial corporations.

The third type is the independent financial advisor that is not usually connected with any bank or financial company but have adequate knowledge about investments and money markets.

Again, these three types of financial advisors come under various categories too. Hence, the list of your financial goals will help find the right financial advisor for you.

Step-5: Finding the Right Financial Advisor

So let’s get down and find a financial planner for you. Here’s a list of different types of financial advisors you will come across in the world.

Savings Planners: They will help you open savings accounts and put money in various savings schemes at banks and credit unions that earn interest. They provide very basic service such as advising you about various plans on offer from banks and credit unions as well how much interest you can earn.

Fund Advisors: Usually, fund advisors have extensive experience about investments in Mutual Funds and Exchange Traded Funds available in the market. Since it’s possible to buy Mutual Funds and ETFs even with little money, these advisors are useful for beginners.

Stocks Advisors: This is a very specialized skill and hence, stock advisors charge a fee. They study stocks of dozens of companies, keep tabs on political scenarios locally and worldwide and other developments that affect stock markets. Hence, they are experts in predicting stock movements and advise clients where to invest.

Wealth Management Advisors: This type of certified financial advisor usually provides a personalized service. They are available from top banks and financial corporations or financial advisory companies. These investment advisors have skills to help people invest in a variety of options – from stocks to real estate, venture funding, and art. Usually, these investment advisors serve high net-worth individuals and families.

Tax Planning Advisors: Are you paying too much tax and don’t know where to save? Consult a tax planning advisor. They will find ways and means to reduce the taxes you pay. They provide a very useful service to everyone- from small income earners to wealthy.

Retirement Consultants: If you are planning retirement but don’t know how to save enough money for those golden years, ask a retirement financial advisor. They will provide the right solutions by suggesting retirement plans and investment schemes.

Debt & Credit Consultants: Need help in balancing between high debt and income? Ask a debt and credit consultant. They know about various plans and schemes that can help reduce your debt burden, save interest and get out of credit faster than you anticipated. They can help prevent you from falling into a debt trap and avoid court proceedings for unpaid debt.

Real Estate Investment Advisors: These are not estate agents. Instead, they advise you on how to invest in real estate regardless of whether you wish to buy a house or in the real estate finance market. Since real estate prices are on the upswing, they can provide some excellent advice on how to invest small amounts of money without actually buying a house or land.

Insurance Advisors: Again, these are not mere insurance agents that will hound you to buy a plan. Instead, insurance advisors can help you find the best plans that suit your present and future needs in life and non-life insurance schemes. They can help you save a lot of money on premiums and get the highest coverage for the price.

Entrepreneurship Advisors: Wish to open a business and need financial advice? As an entrepreneurship advisor. They can show how to open a business with minimum investment for maximum profits. And how to optimize your income for higher returns.

Types of advisors available in your country may differ. However, the categories in the above list will usually be available worldwide, though designations might differ.

Step-5: Fixing Budget for Financial Advisor

Yes, best financial advisors do cost. They charge you directly or indirectly, depending upon how you find the right advisor for you.

Usually, financial advisors that work with a bank, financial corporations, investment companies, insurers, and other such organizations will not charge you. They get commissions for selling a product or plan from their employer. The flipside of such financial advisors: They’ll only provide solutions from their employer causing you to lose on better deals by other banks or financial organizations.

Financial Advisories: These are excellent regardless of your financial goals, money and other factors. Financial advisories hire consultants specializing in every field. Hence, a financial advisory can provide you all round solutions, even when you have little money. And they don’t cost a fortune either. Some financial advisories charge as low as $500 per year.

Independent Advisors: They are available on an hourly basis too. Meaning, you need not cough up a large amount of money to get financial advice. You can retain their services on an assignment basis. Since these are independent advisors, they can provide you the best possible suggestions to make your money grow. In some cases, they might get some commission for selling a savings or investment plan from the company. Yet, that doesn’t really affect you.

Personal Financial Advisors: These are the most expensive lot. They provide personalized advice depending upon your financial situation. Personal finance advisors usually collaborate with counterparts specializing in different finance fields and help you create an amazing portfolio. Despite the cost, having a personal financial advisor is excellent since they are able to provide a variety of solutions.

Investment Advisors: By term investment advisors, I mean all types of financial advisors that help you invest in various things like stocks, commodities, Mutual Funds, and ETFs, currencies, retirement plans and others. They are very useful for beginners and families with a medium budget. They don’t cost a fortune but provide excellent and workable financial advice that can help you become rich.

Financial advisor fees vary from their type of specialized they are in. I suggest you opt for a financial advisor that charges a fee. They will give you excellent advice that serves your interests better. The free financial advisor will definitely sell you products from where they benefit in the form of commissions and retainers.

Using Financial Advice

There’s only one best way to use financial advice: To build an excellent portfolio of that consists of various investments. The right financial advisor for you will help create a portfolio that meets your short, mid and long term financial dreams.

However, you also need to be on guard against fake financial advisors that run rife on the Internet. A lot of online financial advisor will offer high returns for minimal fees and flee with your money. Therefore, you can be extra cautious while finding a right financial advisor for you.

There are several organizations that help you find the top financial advisors who have proper credentials and proven track record. Utilize these resources to find the right financial advisor for you.

Wrap Up

There’s one strong reason why it is important to find the right financial advisor for you. Most people have misconceptions about money and money management.

Only a financial advisor will help you overcome these. Also, Do-It-Yourself (DIY) investing never really works unless you take pains to study financial markets carefully.

And even if you do, it’s still not possible to gain all knowledge while keeping track of stuff like stocks, ETFs, currencies, and commodities among others.

Should I get a financial advisor? I would suggest you should. Hence, paying a little to get superb financial advice is worth the money.

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