At Wimple, we feel strongly about working with a financial advisor that gears their services to your interests. But it can be hard to know who’s looking out for whom.
Sales above all else
Many people calling themselves financial advisors or planners are really salespeople for the companies that pay them to sell their products. In most cases these people are more loyal to the products they sell than they are to your financial interests.
You can determine where things stand pretty quickly by asking your advisor how they get paid. If their compensation is based solely on the fees you pay directly to them, you’re smart to stay on board. If not, it means that your advisor relies at least in part on compensation that comes as a result of the products they’ve sold you. Depending on how you feel about this, it may be time for a change.
We know that the service and advice you receive changes drastically when commissions are off the table. We also know that designations that indicate a certain degree of training, like CFP, CFA and CPA are the hallmarks of the best financial advisors. When you’re interviewing potential advisors, make sure you’re clear on their credentials and experience. It all adds up to a better deal for you and your money.
In another article we discuss the importance of financial advisors interviewing you as much if not more than you interviewing them (1). Beware of the person who focuses initial meetings on themselves, and what they can do for you. Instead, pay attention to the person asking detailed questions about your goals, your interests, your lifestyle and any plans that you have. This line of questioning is a signal that this advisor is preparing to build a plan that works for you, rather than trying to fit you into a certain product category.
At a baseline, we recommend that you work with an advisor who is a fiduciary. This means that they’re legally compelled to put your interests ahead of their own. This designation can be a little murky at times, so it will be important to get clarity from them on the extent of their responsibilities.
Depending on where you are in life, the best financial advisors are prepared to help you meet certain milestones. For example, preparing for retirement may mean moving from high risk investments to more secure vehicles that support your day to day cash flow needs.
In the end, you will know better than anyone else when you’ve found the right fit. When you do, don’t hesitate. Commit and make it happen. And if you don’t know where to start, get in touch with Wimple. Our job is to connect you with the best financial advisors in your area that can help you to take control of your financial future. Contact us today to get started.
Here’s what you can do next
Step One - Search for your desired financial resource
Step Two - Review Wimple’s firm reviews and educational content to understand how these resources can impact your financial decisions
Step Three - Engage with a wiimple firm and take steps to a brighter financial future
Disclosure: This article is not to be taken as investment advice and should not be relied on for such advice or as a substitute for consultation with professional accounting, tax, legal, insurance, or financial professional. The observations made in external articles are independent of Wimple and should not be read as financial recommendations.