How to Find a Financial Advisor
Usually, high net worth and ultra-high net worth individuals don’t have the time or expertise to manage their massive amount of wealth or assets on their own.
That’s why they can greatly benefit from hiring a financial advisor. However, that’s easier said than done. Getting any financial advisor is simple, but if you want the right financial advisor, who will truly help you achieve your financial goals, it can be a bit challenging. So, what you should really be wondering right now is how to find a financial advisor that is right for you. That’s what we’re here to answer today. For more information, you can also read our handy guide on choosing a financial advisor for investors worth $10 million or more.
STRATEGIES FOR FAMILIES WORTH $5 MILLION TO $500 MILLION
7 Secrets To High Net Worth Investment Management, Estate, Tax and Financial Planning
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Pillar Wealth Management is a 100% fee-only, white-glove wealth management firm. We offer various services to our affluent clients to help steer them towards financial success and security. Our team of wealth managers has a combined experience of more than 60 years, so you can trust us to know exactly what we’re doing. Our deep knowledge of the industry and market trends allows us to make tailored financial plans that best serve our clients’ needs.
In this blog, we’ll be discussing how to find a financial advisor that is right for you, how much money you need to see one, and whether it’s really worth hiring a financial advisor. Let’s dive in.
5 Keys to Choosing a Financial Advisor
1. Know what financial services you need
Before you start looking for a financial advisor, you need to evaluate your needs. Then, when you meet with a potential advisor, you can ask the right questions and decide if this is someone you can trust to help you meet your goals.
So, what are your goals? If you have savings that you’d like to invest, you’ll need an advisor to help you choose investment vehicles that match your risk level. You may want help with managing the assets you have or with retirement planning.
2. Look for an advisor you can trust
Your financial goals will partly determine which type of advisor will meet your needs, such as a robo- or online advisor. However, if you decide to hire a human advisor, you need to ensure they are fully qualified to provide the services you’re looking for. Any financial advisor you work with should be registered with the SEC or the state, and you can check their credentials on the SEC website.
You should work only with fiduciary advisors; these advisors have a duty to provide advice that is in the best interests of the client, to put the client’s interests above their own, and to fully disclose any conflicts of interest.
3. Consider financial advisor options
Robo-advisors provide low-cost investment advice online. Based on the information you provide, computer algorithms create your investment portfolio. Robo-advisors are ideal for beginners or investors with straightforward investment goals.
Robo-advisors have low fees and are ideal if paying for a human advisor exceeds your budget.
2. Online financial advisors
Online financial advisors act like robo-advisors with the addition of some advice from a human advisor when needed. You can consult with a team of advisors or be matched with a dedicated advisor. Online advisors can work with you to build a financial plan and make investment choices.
Online advisors cost more than robo-advisors but less than traditional advisors. Some of them require an account minimum. Online advisors are great if you don’t need to meet your advisor in person.
3. Traditional financial advisors
A traditional financial advisor will meet with you in person. They are experts in investment management, retirement planning, and most financial services. If not, they will recommend a professional to consult with you.
4. Consider how much you would pay an advisor
You will pay a yearly management fee to use a robo-advisor, typically 0.25 to 0.5 percent of your assets. The robo-advisor will also charge fees to invest your money, which typically range between 0.05 and 0.25 percent of the money invested. These fees are deducted from your account on a daily basis.
Online financial planners offer financial services through a robo-advisor or meeting directly with the investor by video or phone. You may work with a team of advisors or a dedicated advisor.
Online advisors charge either an AUM fee (ranging from 0.30% to 0.89%) or a flat annual fee starting at about $1,000 a year, up to several thousand dollars, depending on the services you need. Some services may charge a separate fee.
For investment management, traditional advisors typically charge a percentage of the assets they manage for you (1% on average). Some traditional advisors require a minimum investment, often substantial. Some advisors may charge a fixed annual or monthly fee for financial planning and investment advice.
Traditional advisors may charge an hourly fee for consultations or a flat fee for a financial plan or an estate plan, varying from $1,000 to $3,000.
5. Vet the financial advisor’s background
Verify an advisor’s credentials before deciding to work with them. Check for any irregularities with the Financial Industry Regulatory Authority (FINRA), which oversees US broker-dealers. FINRA is government-authorized and ensures that anyone who sells securities has been tested, qualified, and licensed.
Someone in your personal network may be able to recommend an advisor. You can also find suitable candidates online, which you can then interview to see if they can help you meet your financial goals.
You don’t need a financial advisor if you feel comfortable making investments on your own. But if you need help with your finances, including planning for retirement, you should hire an advisor.
As a yearly fee, many advisors charge a percentage of the assets they manage for the client, averaging 1%. Others may charge up to $10,000 per year for that service.
You should have at least $50,000 ready to invest, but some advisors may require $250,000 or more. In contrast, many online investment platforms have no minimum account requirements in order to invest.
You should look for a fiduciary, meaning the advisor works only in your best interests. They should always fully disclose any conflicts of interest, and their fee structure should be transparent.
A financial planner will work with you to define and implement a financial plan to meet your financial goals, including investing, while an advisor is usually more focused on investment management.
You should talk to a financial advisor when you feel overwhelmed by managing your finances, or you want expert advice on making investments, buying insurance, or paying taxes.
The CFA Institute has a member directory that allows you to verify an individual’s charterholder status. It takes about four years to complete the course.
A financial advisor is able to create a financial plan that, when implemented, will meet the goals of the client, including making profitable investments and planning for a secure retirement.
Individuals with complex financial situations may feel they need help managing their investments or require the expertise of an advisor to create a trust or a foundation, for example.
How to Find a Financial Advisor: 10 Key Factors
Before you start looking for a financial advisor, we’d suggest thinking about why you really need a financial advisor. What kind of assets you hold, what services you will require, and how much wealth you have will help you get a better idea of what you really need and therefore, find the right financial advisor. Here are some factors you should consider for how to find a financial advisor. You need to know that some of them have different specialties, and there are many different types of financial advisor, such as robo advisors, certified financial planners, and so on. If you want a robo advisor, then you will use a robot as your advisor, not a human.
1. Track Record and Experience
When looking at how to find a financial advisor, one of the first things you should consider is a financial advisor’s track record and experience. These will say a lot about their abilities and how well they can handle individuals with $5 million to $500 million in liquid assets. The financial industry is a tough place, and only those advisors who have extensive experience and a good track record will be able to capitalize on market trends effectively to help their clients grow and protect their wealth.
Therefore, you will need to see how long they have been working as financial advisors, their track record, what their previous clients say about them, and what kind of results they’ve had so far. How to find a financial advisor can be learned, and looking at these factors is a good starting point to find the right financial planner. Or you may ask someone working with a financial advisor, such as a friend, colleagues, or others about the services.
2. Fiduciary Vs. Suitability Standard
When working on how to find a financial advisor, one question is, “what’s the best financial advisor for me?” The best financial advisor for you is the one that holds to a fiduciary standard. Amongst other differences, there is one major distinction that you will find between financial advisors. Some follow the fiduciary standard and some follow the suitability standard.
Now, essentially, since you are hiring and paying them for their services, financial advisors are responsible for guiding you towards good financial decisions. However, depending on the type of advisor, their definition of good can be different. Financial advisors who hold themselves to the suitability standard are obligated to recommend investment management services and investment advice that are suitable for you.
This doesn’t mean they are bad, but they’re not necessarily the best either. Such financial advisors look out for their own interests as well and opt for investments or products that benefit them as much as you.
On the other hand, financial advisors who hold themselves to the fiduciary standard are wholly committed to serving your best interests, even if they are incurring losses over it. That’s what makes them the best financial advisor for you. They don’t have any conflicts of interest and, therefore, have no problem guiding you towards investments and products that best align with your goals and needs. To know more, click here to start chatting with the fiduciary advisors at Pillar Wealth Management.
3. Understanding of Costs
Another way to learn how to find a financial advisor that is right for you is to check potential advisors’ understanding of costs. Excessive costs are one of the best ways to slowly and gradually lose large amounts of wealth. If you thought that taxes and your advisor’s fee are the only things you needed to worry about, you’d be gravely mistaken. In reality, there are so many hidden costs and charges that are involved in wealth management.
There are taxes on capital gains, transaction charges, account minimums, bond sale spreads, internal expenses, margin interest costs, and a lot more. If your advisor doesn’t inform you of these costs, or worse, doesn’t know about them, they won’t do a very efficient job of managing your wealth and minimizing your expenses. This is just one of the aspects. If you want to find out about the other shifts you must make, click here to read our guide on maximizing portfolio growth strategies.
4. Constant Monitoring and Adjustments
When considering how to find a financial advisor, you need to consider whether a financial advisor will also be proactive. They won’t just come up with a fixed financial plan and stick with it for the rest of your life. This is actually what you can expect at a lot of private banks, where they have fixed investment packages that are proven to have good results with low risks for the bank. However, times are always changing, and a good financial advisor knows to adjust your financial plan accordingly.
How to find a financial advisor when it a matter of a marriage, divorce, recession, or market volatility means looking at whether an advisor can guide you in making the right financial decisions to preserve your wealth and leverage the market. Learn more about preserving and protecting your wealth by ordering a free hardcover copy of our book, The Art of Protecting Ultra-High Net Worth Portfolios and Estates – Strategies for Families Worth $25 million to $500 million.
5. Commission VS. Fee-Based Payment Model
When considering how to find a financial advisor, you should also consider the payment model your advisor is using. Some financial advisors work on a commission-based payment model where they earn a commission every time they buy or sell a security on your behalf. There isn’t necessarily anything wrong with this model, except that sometimes, certain financial advisors can exploit clients by making excessive transactions to increase their commissions. That’s why it’s a safer choice to stick with financial advisors who charge a flat fee for their services.
Pillar Wealth Management is a 100% fee-only wealth management firm. Moreover, our wealth managers have experience of more than 30 years of minimizing tax and other expenses. This allows us to maintain low costs and charges for our high net worth and ultra-high net worth clients. If you’re concerned with your own costs, click here to get in touch with one of our advisors today.
6. Holistic Approach to Wealth Management
When you’re wondering how to find a financial advisor that is right for you, look for one that has a holistic approach to wealth management. If your current planner is entirely focused on producing impressive results from your portfolio, you should consider switching to a new planner.
The best financial advisors know that comprehensive wealth management is more than just about portfolio performance. It’s about an individual’s own goals and aspirations in life. Their portfolio is just a means to an end. Comprehensive wealth management also takes into account their retirement goals, legacy planning, philanthropic plans, and more. Find out more truths about portfolio performance by clicking here to read our comprehensive guide on improving portfolio performance.
When you’re trying to understand how to find a financial advisor, you should also analyze your own needs and then compare them with the services offered by the financial advisor. For instance, if you’re single without any family or a lot of assets or real estate, and you simply need help with retirement planning, you can go for a financial advisor that specializes in retirement planning.
However, if you have a family who will be your beneficiaries, have a large and diverse set of assets, and lots of financial goals and targets, you will need a financial advisor that offers or is well versed in various financial services. At Pillar Wealth Management, we offer a range of financial services such as investment management, estate planning, retirement planning, risk management, and a lot more. Learn more about our services by checking out this handy guide for investors worth $10 million or more.
Check the credentials of the financial advisor if you are wondering how to find a financial advisor for high net worth investing. Sometimes, advisors can purchase various certifications or designations that may seem like they know a lot, but in reality, they don’t mean much. Therefore, carefully go over their credentials and backgrounds to determine whether they are the right financial advisor for you or not.
9. Frequency of Updates
When wondering how to find a financial advisor that is right for you, you should consider how well they communicate with their clients. You don’t want a financial advisor that only contacts you once a year and perhaps, too, just to get you to buy some new security. Ideally, your financial advisor should provide you with monthly or quarterly reports over their activities, various transactions, portfolio performance results, as well as future plans and predictions. Such an advisor will always be fully transparent with you and always keep you in the loop. Click here to start a conversation with one of our experienced and transparent advisors. Understanding how to find a financial advisor requires some effort, and we can help.
10. Personalized Financial Plan
As you learn how to find a financial advisor, you will discover that the right advisor will make sure to understand all your financial needs and goals so that they can develop a personalized financial plan. This is one of the key features of a good financial advisor. They don’t just ask what your risk tolerance is or how much assets you want to accumulate. Rather, they ask you about what you really want in life, what your short and long-term goals are, what kind of lifestyle you aspire for, etc. You can find out more about the right financial advisors from our ultimate guide on choosing the best financial advisor.
How Much Money Do You Need to See a Financial Advisor?
Many people ask themselves, “how much money do I need to see a financial advisor?” Well, there really isn’t any set benchmark for how much money you need to have before seeing a financial advisor. The services offered by a financial advisor or investment advisor can be beneficial for anyone at any stage of their life. Financial advisors can be stockbrokers, accountants, insurance agents, or others.
A financial advisor can help young students deal with their educational debt or others to set up saving plans. However, for high net worth and ultra-high net worth individuals, a financial advisor is absolutely necessary. With their help, such individuals can prevent large losses of wealth to taxes and preserve their assets to fulfill their financial goals.
Is It Really Worth Meeting With a Financial Advisor?
For individuals with $5 million to $500 million in liquid assets, making any financial decisions can be quite hard. This includes hiring a financial advisor. Every time they think of doing so, they might find themselves asking, should I meet with a financial advisor? Is it really worth it? We’re here to tell you that it is. A financial advisor can be of great benefit to high net worth individuals. They are experienced and well versed in matters of wealth management.
Pillar Wealth Management has an excellent team of investment advisors and financial advisors that are always striving to help high net worth clients achieve financial success and security. We offer various services, such as investment management, credit card management, risk management, tax planning, retirement planning, estate planning, accounting, and much more.
Our financial planners have experience of more than 30 years, which equips us with all the knowledge and skills necessary to help our clients. If that sounds like something you’re interested in, contact us and access our website, or click here to book a consultation session today.
To be 100% transparent, we published this page to help filter through the mass influx of prospects, who come to us through our website and referrals, to gain only a handful of the right types of new clients who wish to engage us.
We enjoy working with high net worth and ultra-high net worth investors and families who want what we call financial serenity – the feeling that comes when you know your finances and the lifestyle you desire have been secured for life, and that you don’t have to do any of the work to manage and maintain it because you hired a trusted advisor to take care of everything.