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5 Things to Look For in a Financial Advisor

Money is not everything, and you shouldn’t base your entire life around it. However, at the same time, financial resources are important. If you don’t have them, you can’t pay for the basic things you need to survive, like food and shelter.

As you work during your adult life, at some point, you should start planning ahead. That means knowing what to do with your money so that it grows. If all goes according to plan, you’ll have the resources you need for significant purchases and projects as you get older.

That often means seeking a financial advisor’s aid. But what should you look for in a financial advisor?

Let’s examine that question for a moment.

Experience

Not all financial advisors are created equal. For instance, there’s a difference between talking to your uncle who owns a couple of stocks versus sitting down with an individual at a bank or credit union and outlining your goals.

With financial advisors, you’re looking for someone who:

  • Has a finance, business, or accounting degree
  • Can speak authoritatively about things like stocks, bonds, annuities, mutual funds, etc.

You should ask your prospective financial advisor about other clients they’ve helped. You’ll want them to get specific about your different options. A neophyte financial advisor isn’t the best option: ideally, you want someone who has been doing this professionally for several years.

Where They Work

You should also pay attention to where the advisor works. Financial advisors generally work at:

  • Banks
  • Credit unions
  • Insurance companies

Occasionally, they might have an attachment to some other financial entity. The point is that no respected financial advisors work out of their mom’s basement.  

You want to approach someone who has professional offices and keeps regular business hours. Think of a financial advisor like you would a realtor or lawyer.

You’re looking for professionalism. If you’re not getting that impression when you meet them, then you don’t want to take their advice or trust them with your money.

Their Demeanor

You don’t have to be best friends with your financial advisor and invite them to your next birthday party. At the same time, they should make you feel at ease when you talk to them about your goals.

You don’t want an advisor who uses complex terminology that you might not be able to understand.

Maybe you know a great deal about investing when you go to them, or perhaps you’re just getting started on this path. Either way, you want someone who seems to be on the same wavelength as you.

If you ask your advisor to explain a concept, and they’re not able to do it satisfactorily, then you might want to go with someone else. There should be no mystery about where your money is or what it’s doing.

They Should Respect Your Wishes

You should also remember when you’re talking to potential financial advisors that you have goals that are probably not identical to anyone else’s.

You may want to retire by a certain age. You might have kids going to college soon, and you want to set money aside for that. You may want to look into an aggressive mutual fund that’s mostly stock-based, or perhaps a safer bond-based one is more your speed.

Whatever you want to do with your money, your advisor is there to outline some possibilities for you. They’re not there to bully you into doing something with your resources that you don’t want to do.

You’re always the one who’s in control, and your advisor needs to respect that.

They Should Be Open to You Changing Your Mind

One undeniable thing about life is that it’s going to throw you some curveballs. Things won’t progress precisely how you expect.

Because of this, you should be ready to change up your investment strategy at a moment’s notice. You may have to pull some money out of an IRA if you have some hefty medical bills to pay. You may want to use some of your 401K to put a down payment on a house.

Your financial advisor should be ready to help you adjust your strategy if your circumstances change. They should not try to lock you into a rigid financial mindset. Fluidity is essential with investing and financial planning.

If you find an advisor who seems to check all these boxes, then you might be a great fit for each other. You might have a multiple-year relationship that could help you out immensely.