By: Anthony Pugliese
How to Choose the Right Financial Advisor: Key Criteria to Consider
Choosing a financial advisor can be one of the most important financial decisions you make in your lifetime. Whether you are planning for retirement, managing and inheritance or other windfall, starting a business, or just trying to get a better hold of your personal financial management, the right advisor can help provide critical guidance to set you on the right path. But with so many titles, fee structures and variety of planning types out there, how do you make the right choice without falling into the trap of chasing firm brands or titles alone? Below I will break down the core criteria to consider when evaluating a financial advisor.
Understand What You Need
Before diving into a google search for advisor websites or asking a friend for a referral, clarify your own goals and what you are looking to accomplish. Whether it is investment advice, retirement planning, help with tax or estate planning, or maybe an immediate need for advice based on a life event, different advisors may specialize in different areas. Some may only focus on investment management, others comprehensive planning. Your needs should guide your search. That’s why we have put together a team at Marshall Financial Group that covers the full suite of specialty areas to help our clients and future prospects achieve their goals when it comes to any financial topic.
Look for Relevant Experience
Experience often matters more than titles. Be sure to ask questions such as: How long have you been advising clients? What kinds of clients do you typically work with? Have you worked with anyone in a similar situation to me? A seasoned Advisor will likely have dealt with a variety of scenarios and can draw on real world experience to guide you.
Understand their Compensation Structure
Advisors can be compensated in several ways.
Fee-Only – charging a flat fee, hourly rate or percentage of assets under management
Fee Based – charging fees as above, but may also earn commissions on products
Commission Based – They earn money solely from selling financial products
Each model has pros and cons. Just be sure you understand how your advisor is paid and what incentives may exist. This is why we ensure that we are transparent about all fees our clients pay and have direct conversations with our prospects during the onboarding process.
Ask About Their Investment Philosophy
Your advisor’s approach should align with your comfort level for risk and achieving your financial goals. Ask the advisor how they build their investment portfolios? Do they believe in active or passive management? How do you manage risk? Be wary of advisors who make promises for unusually high returns or dismiss the importance of diversification and long-term goal planning.
Gauge Communication and Rapport
Good advisors communicate clearly and consistently. You should feel comfortable asking questions and be confident that you are getting honest answers. You will want to know how often the advisor plans to meet, if you will have online access to tools and reports. Also, does the advisor explain complex topics in a manner that is easy to understand. Trust your instincts in how you connect with the advisor and determine if they are someone you can trust to work with you and your family.
Final Thoughts
Choosing a Financial Advisor doesn’t come down to one title or firm. It’s about finding someone whose experience, approach, and values align with yours. By asking the right questions and doing your homework you can find a professional who truly supports your financial wellbeing. The best advisors are the ones who put you, your family, and your goals at the center of the process!