How To Invest and Save Money
Britt Erica Tunick is an award winning financial journalist who has spent the past 17 years writing about virtually every aspect of finance. She has mastered the art of boiling down complicated financial topics for readers to understand. |
When choosing a financial advisor, take into account the difference between a registered investment advisor and a wealth manager, the fees charged, and the products offered. What to Look for in a Financial Advisor
What to Look for in a Financial Advisor
By Britt Erica Tunick
Unless you are someone who earns a living as an investor, when it comes to mapping out your retirement plan you should give serious consideration to hiring a financial advisor. While the expense of an advisor is something most people would rather avoid, in the long-run a good financial advisor can pay for the expense of hiring them several times over both by helping you create the smartest possible plan of attack for saving for retirement, as well as helping to identify any current expenses that can be reined in or eliminated.
Although there are many good financial advisors out there, not all advisors are worth the fees they charge. Choosing the wrong advisor can be a costly mistake.
Here are a few things to keep in mind when choosing a financial advisor:
- There is a difference between a registered investment advisor and a wealth manager with the latter often being linked to specific investment or mutual fund companies that pay them commissions in exchange for recommendations for their products. Before hiring someone to manage your finances or help with retirement or estate planning, ask if they receive commissions for any product recommendations. Unlike wealth managers, registered investment advisors are legally obligated to put your financial interests above any potential commissions they might receive.
- Make sure to ask about all the fees that you will pay and what they are for. Keep in mind that the fees paid to an investment advisor are different than the fees paid to fund managers for investments in products such as mutual funds or index funds.
- Look for a financial advisor whose expertise goes beyond just investing and is able to help with all aspects of saving for your future from estate planning to tax advice.
- Ask your advisor for information and their recommendation on comparable investment products and how the fees differ.
- Given that your financial needs will change depending on what stage of life you are in, or as you experience certain life events such as getting married or the birth of a child, make sure the advisor you choose is able and willing to monitor your changing needs, so that you can alter your investments and savings plans accordingly.
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