Hello and welcome back to the Successful Financial Strategies blog! On our blog, you can expect to learn more about all aspects relating to your finances. Lately, we’ve been talking about financial planning, including what it is and why planning is key to finding financial success. We can’t control everything that happens in the world that affects our financials, but making progress towards our goals will always require making a plan and making deliberate actions toward measurable goals.

Today, we are going to talk a little more about the role that a financial advisor plays. Your financial advisor will be a key player in your financial strategy. However, there are some questions that you should ask them before you decide to work with them and place the future of your finances in their hands.

Are you a fiduciary?

Understanding how a financial firm is structured may seem like something you don’t need to know; as long as they do their job and you are reaching your financial goals everything is fine, right? However, that isn’t how it works. How your financial firm is structured will determine not only how your financial advisor is paid — and thus their motivation — but also the services they provide.

How do you get paid?

Finding out how your financial advisor gets paid is important, for it will determine what motivates their actions. You would hope that any person offering financial planning services would be motivated by your needs because that is what you are paying them for. However, this unfortunately isn’t always the case. Some financial planners are paid commission on how many financial products they sell, while others are paid a percentage in direct correlation to the amount of money they are managing. Those that are paid by how much money they manage will always be motivated to increase your wealth.

What are my all-in costs?

Have you ever gone on a trip and budgeted a certain amount of money to spend, but forgotten about all those little costs like buying bottles of water and sunscreen, and paying parking costs? Likewise before you make investments with a financial advisor, you will want to ask about all-in costs: fees that, over time, can annihilate your savings.  

What services are included?

Before you commit to the financial planning services of an advisor, you must understand completely the kind of services that they can offer you. There is a reason why there are multiple options to choose from when looking for a financial planner. Make sure that you are choosing one that not only offers the services that you need to help you reach your current financial goals, but also one with whom you feel comfortable and you like working with. Also, find out what type of clients that your financial advisor normally works with; finding out their client demographic will allow you to see how familiar they are working with clients in your situation.

Stay tuned for part two to learn about 5 more questions that you should ask a potential financial advisor. If you are in need of financial planning services in the Arden area, contact Successful FInancial Strategies. Visit our website to learn more!