How to Hire A Financial Advisor
8 Signs That Now Is The Time To Hire A Financial Advisor
Financial planning tends to receive a lot of attention when things get messy. When markets begin to crash, and the world goes through instability, people begin to question the quality of their financial decisions. When is the best time to hire a financial advisor?
STRATEGIES FOR FAMILIES WORTH $5 MILLION TO $500 MILLION
The insights you’ll discover from our published book will help you integrate a variety of wealth management tools with financial planning, providing guidance for your future security alongside complex financial strategies, so your human and financial capital will both flourish.
Clients frequently share with us how the knowledge gained from this book helped provide them tremendous clarity, shattering industry-pitched ideologies, while offering insight and direction in making such important financial decisions.
Topics like asset allocation, risk management, lifestyle planning, and personal finance have become hot topics. Financial planning also gains importance when a person approaches retirement, or if you have over $10 million to invest, in that case, you should check out this special Guide for $10+ Million investors.
However, at Pillar Wealth Management, we believe that financial planning is not an event-driven concept, especially for those with $5 million to $500 million in liquid assets.
To us, financial planning is something that keeps you calm when there is panic all around, helps you through significant transitions in life, keeps you from feeling lost, helps you with retirement, and most importantly, helps you achieve your financial goals.
If you feel that you want to work with a financial planner, either because you are facing plenty of questions, do not have enough knowledge or expertise in specific areas, or simply do not have the time to become an expert, then gaining more insights about financial planning is a good first step.
In this article, we will discuss several important questions that can be helpful when you decide to hire a financial advisor in detail so that you can make smart choices. Let’s begin!
Table of Contents
When is it time to work with a financial advisor?
If you have just graduated from college and are about to begin your first real job, you do not have much to worry about. All you have to do is pay your rent, buy groceries, and collect your paycheck.
Of course, you also have to save money and invest it in the future. But, there are no complex financial decisions to be made. For such cases, a financial planner is not necessary.
But as you grow into your career and start accumulating wealth, things change. You buy real estate, you get married, your kids start going to school, you start a business, and life begins to happen.
Your financial life becomes more complex, and you start thinking about taxes, paying off student loans, and perhaps managing your credit score. At Pillar Wealth Management, we deal with these topics every day for clients with $5 million to $500 million in investible assets.
If you have inherited a large business that has been with the family for generations, then at some point, you start thinking about succession planning. Many high net worth individuals are also dedicated to philanthropy or to a cause that matters deeply. As Warren Buffet once said, “giving money away is more difficult than making it.”
Then there are also other topics like insurance, risk management, and the legacy you want to leave behind. Read about specific financial questions that high net worth individuals with $5 million to $500 million in liquid assets face in this complimentary book on selecting the best financial advisor.
Unless you are an expert on investment management services, accounting, estate planning, and retirement planning, you probably cannot make the most optimal decisions yourself as you used to when you were a newly graduated young professional.
How much does a financial planner cost?
If you are considering hiring a financial planner, you must surely have wondered how much a financial planner costs. Financial planners generally charge a fee for providing their services. Hence, money matters, so you can choose the most suitable payment model for you.
This fee can either be based on an hourly rate or a fixed amount based on pre-determined milestones. A time-based model is when the financial planner does work for a certain amount of time and then bills those hours to the client.
A milestone-based model is one where the financial planner and the client determine a set of milestones along with timelines for each milestone. Once a milestone is completed, the amount of compensation for that particular milestone gets released.
Then there is the assets under management (AUM) model in which the fee is a fixed percentage of the total assets that are invested through the financial planner.
This structure has the most transparency because the fee percentage stays the same no matter whatever services are rendered. The fee amount changes according to the value of the assets.
So, in a way, the fee amount is aligned with the performance of the portfolio. The more the portfolio grows, the greater the fee amount. For example, 1% of $10 million is $100,000. But 1% of $15 million is $150,000.
Pillar Wealth Management follows this model. You may get in touch and have a free consultation to know more.
There is also a compensation model where no fees are charged. This sounds very attractive in the beginning. However, financial planners also have to make a living, and they have to get paid one way or another.
The way they get compensated is through commissions. Whenever the client purchases an investment product recommended by the financial planner, the company that sells the product pays a commission to the financial planner.
The benefit of this model is no fee to the client. However, the big downside is that the incentives for the financial planner are not aligned with the client’s best interests.
For example, a financial planner may end up recommending investment products like a mutual fund or an insurance policy that the client does not really need. The financial planner may do so to earn a commission.
Remember that fees are not the same thing as costs. Costs are something that the client will incur for making investments or carrying out transactions. If you want to know more about the difference between fees and costs, then make sure you download this complimentary book about choosing the best advisor for investors with $10 million or more in liquid assets.
What benefits can you expect from a financial planner?
A financial planner is someone who helps connect your financial decisions to your financial goals. A good financial planner will carefully understand every single aspect of your financial life. Based on the inputs, he/she crafts personal financial planning that touches upon multiple topics like financial security, tax planning, retirement, succession, estate planning, etc.
The ultimate goal of this strategy is to enable you to reach your financial goals. A financial planner should help you make smart decisions that will impact your life for years to come.
The holistic approach of professional financial planning involves multiple subject areas, each of which would usually require the services of a dedicated professional. However, co-coordinating the work of multiple individuals is time-consuming and complex.
With a dedicated financial planner, you deal with one person. For example, at Pillar Wealth Management, either Hutch or Chris, the founders of Pillar WM, will work with you to work out every single aspect of your high net worth portfolio. Feel free to start a conversation with them to know how they can save you time and money.
A financial planner is also someone who is up-to-speed with what the markets are doing, where the economy is headed, and where assets should be allocated.
The right asset allocation can help minimize the drawdowns that hit investors during every economic downturn. They do this full-time for a living and are more knowledgeable than someone who runs a business and tries to study the market part-time.
Financial advisors can make smart decisions about where to invest, how much to invest, and how to minimize the cost of those investments. Very few people concentrate on the cost part, but it can be a significant factor when large sums of money are invested over long periods.
In fact, if you can spare some time, then we recommend that you download this book on improving portfolio performance for high net worth portfolios between $5 million and $500 million.
It explains how portfolio performance isn’t just about generating a higher rate of return. It is about approaching portfolio management from a much broader perspective.
Any financial advisor can make a financial plan and help clients make investments. But, the work of the best financial advisors does not end there. The elite-level financial advisors regularly update their clients on how they are progressing towards their life goals.
They make a commitment to do whatever it takes to keep their clients on track. If changes need to be made, then they will communicate their thoughts with the client right away.
This personal touch and an element of hand-holding is another important benefit of a successful financial planner.
If you have been wondering what benefits can you expect from hiring a financial planner, then a one-word answer is – many.
How do I find the best financial planner near me?
Working with a certificated financial planner (CFP) to obtain customized financial advice and planning will to help you feel more secure, so you do not have to worry about going bankrupt or running out of money.
It is like working with an IT expert that provides deep research on a website. Especially when you run a business, the IT expert will focus on some essential elements, for instance, measuring add performance, analyzing the market for audience insight, measuring content performance, working with partners to process data, and so on. In content measurement, the IT staff may upload Getty images, etc.
This is similar to when you have the support of an investment advisor, certified financial planners, financial advisors, or Robo advisors.
And you can work on the financial planning that you prefer. CFPs work based on their clients’ interests, putting them as their first concern. Therefore, as a client of a certified financial planner, you should not worry that your planner will do something that can harm your assets.
CFPs have fitness standards to ensure they work based on the values defined by their certification, which is why you should investigate a planner’s credibility before deciding to work with him or her. By so doing, you will avoid any negative effects on your finances that would unnecessarily impact your financial future due to incompetent wealth planning. So, as a high net worh individual, you will benefit if your advisor is able to develop decent wealth planning. Otherwise, you could lose a lot more money than ordinary people. You should also pay great attention to your monetary plans by working on estate and retirement planning, life insurance, and investments so you can achieve the financial goals that you dream of.
In brief, there are two things that you need to consider when looking for the best financial planner near you. First, the financial planner has to be among the best. Second, they have to be based at a convenient location, preferably close to where you are.
If you want to delve deeper into what makes a financial planner the best when it comes to managing high net worth portfolios, download our guide: The Ultimate Guide to Choosing the Best Financial Advisor: For Investors With $5 Million to $500 Million in Liquid Assets today.
If you are a high net worth or an ultra-high net worth individual, then you want to find the best financial planner for high net worth portfolios. One of the easiest ways of finding such a financial planner is to speak to other high net worth or ultra-high net worth individuals in your personal network.
The chances are that some of them may already be working with a reputed financial planner.
You can also get in touch with your relatives or family members. They will give you an honest review about good financial advisors that they know of.
You can also schedule a conversation with Pillar Wealth Management, a fee-only fiduciary financial advisor that specializes in portfolios ranging from $5 million to $500 million.
Other ways of finding the best financial planner would be through your own research. The CFP professional website is a great source to find certified financial advisors by zip code.
So, you can find financial advisors who are within a pre-defined radius of your location. The CFP website is for US-based financial advisors. If you happen to live outside the US, then you can access the relevant Financial Planning Standards Board (FPSB) website. There are FPSB websites for individual countries.
If you want to search financial advisors by compensation models, then the NAPFA website is particularly handy. NAPFA stands for the National Association of Personal Finance Advisors.
Its database allows you to screen financial advisors based on their fee structure. The same applies to The Financial Planning Association. FPA’s website also allows you to filter financial planners who are fee-only. So, if you want fee-only financial advisors in a specific location, then you can find a list on NAPFA and FPA (Financial Planning Association). Besides, these advisors are monitored by the U.S. Securities and Exchange Commission (SEC) to ensure that they always deliver their job based on the fiduciary standard.
Thus, there are multiple answers to the question “How do I hire a financial advisor?”.The best answer is the one that works for you.
Hutch Ashoo and Christopher Snyder are the expert founders of the independent, fee-only, and fiduciary wealth management firm Pillar Wealth Management. They will provide you with customized wealth planning that is specifically made for your needs.
If you would like to speak with them or simply ask any questions about how custom and trusted wealth management advice is offered to high net worth individuals with $5 million to $500 million in investible assets, then feel free to start a conversation.
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