GuideVine easily helps you narrow down the thousands of financial advisors out there to ones in your area, like New York, that are suited to your life stage, advisement needs, net worth, and income. But once you run your search on GuideVine, you’ll still need to narrow down your choices. Here’s how to end up with a financial planner you love and trust.
1. Decide on Payment Structure
Some financial advisors may make a salary, but more often, they are paid through a flat retainer, an hourly fee (typically $100 to $300), or a percentage of your assets (typically 1%). You’ll also find this info in their GuideVine profile.
A flat retainer is good if you want to have access to them all the time for making decisions and coaching you on your spending habits. An hourly fee is good if you need someone to work with you on a plan, hand it over to you, and then butt out until you next need them a few months or a year later. Paying a percentage of your assets makes sense if your financial situation is complicated—and you have significant investable assets to speak of.
Financial planners can also earn commission from selling products to you like life insurance, renter’s insurance, annuities, etc. This last method of payment is controversial, as some say it leads to conflicts of interest, with your supposed advisor selling you items that will make them more money. So proceed with caution.
2. Verify They are Certified
At the bottom of each planner’s profile, you’ll see their certifications and memberships. While accountants and insurance agents can refer to themselves as financial planners without any governing body to back up their claims to expertise, Certified Financial Planners (CFPs) have to have education in the area of personal finance, plus have passed a stringent exam.
A Chartered Financial Analyst (CFA) will give you advice, plus manage your investments. Verify that your prospective planner is certified and doesn’t have any disciplinary action against him or her at www.cfp.net.
3. Find Out Who Their Typical Client Is
When you ran your initial search on GuideVine, you could filter by your life situation, but make sure to double check with prospective planners. Ask them who their typical client is, and see if it sounds like you. Also, if you are in a special situation, like you own your own business, check to see if that is listed among their additional focus areas in their profile.
4. Set Up an Initial Meeting to Get to Know Them
Now for the squishy part that can’t be quantified in a search. You should be comfortable talking with your financial planner, because you will be sharing very personal, and sometimes emotional, matters. They’re almost like a therapist for your money. In fact, you should meet up with several potential advisors before you settle on one, because they’ll be helping you make some of the most important decisions of your life.
Figure out if you like their style. How often will you talk? If you prefer to drop into their office, will they be available? Are they big into email like you? More importantly, make sure their values jive with yours. If you’re a dad who wants to live simply, make sure they see the value in simplifying while providing for your kids. If you’re a couple who wants to travel the world on a boat, they should be excited to help you work toward an excellent retirement involving a sailboat.
5. Ask If They Operate as a Fiduciary.
That is, will they legally be acting in your best interest, even if it means they will earn less money by doing so? They should say yes with conviction. If they don’t? Move on.
6. Beware of big promises.
A good financial advisor is optimistic and supportive, but not magical. If he or she says she will—without fail—beat the market, or guarantees returns, he or she is lying. (That’s what Madoff told his clients.) You’re looking for someone to give you good, safe financial advice to grow your worth over time, not get you rich overnight.
You’re also looking for someone who will deliver bad news and not always tell you what you want to hear. That private plane you want to buy? If it’s not in your budget, your financial advisor should say so, and strongly.
While GuideVine simplifies the process of finding a financial advisor, it’s still very important to take the time and put in the effort to finding someone you can trust. After all, you wouldn’t take the first match Match.com gave you, why do the same with your financial advisor?
Read Our Complete Guide to Finding a Financial Advisor