![CollegeInvestor_1200x628_How_To_Find_A_Financial_Advisor How to find a financial advisor](https://cdn.thecollegeinvestor.com/wp-content/uploads/2023/02/CollegeInvestor_1200x628_How_To_Find_A_Financial_Advisor.jpg)
Millennials are just beginning to consider hiring financial advisors en masse, and different types of financial advisory firms are beginning to market themselves specifically to young adults. Some of these are online services, such as those reviewed here: Vanguard and Betterment. doing.
So how can you find the right financial planner for your needs? What type of financial planner do you prefer?
If you’re a young adult or millennial, here are some tips and tactics for finding and scrutinizing a financial planner.
What kind of financial planning do you need?
Before looking for a financial planner, you need to understand what type of financial plan you actually need. Why do you think you need someone to help you? What are you looking for in help?
It may sound strange, but there are many nuances in financial planning. For example, are you interested in:
- Wealth Management (where someone chooses your investments and manages your portfolio)
- Estate planning (what happens to your assets when you die)
- Life events (marriage, childbirth, etc.)
- Dealing with windfall (employee stock options, bonuses, inheritance, etc.)
- General financial reviews (including insurance reviews, etc.)
- Professional topics (including business or real estate ownership)
Notice: I don’t have a tax plan. Some financial advisors do tax planning, but many do not. Our tax experts are at your service when it comes to tax planning to make sure nothing gets messed up. When it comes to investing, there are many horror stories of battles between financial planners and tax accountants.
Maybe you want all of the above? Or maybe you’re experiencing one of these issues and need personalized advice and just want to talk to your financial girlfriend planner.
A good understanding of what you are specifically looking for can help you understand which type of financial planning firm (or individual) is right for you.
Which financial planning firm is right for me?
Once you know what kind of plan you’re looking for, you need to find a real financial planner.
The first thing to decide when looking for a financial planner is whether you’re comfortable with the “do it yourself” approach that online financial planning offers, or if you’d rather talk to someone to create a custom plan for you. is.
Among them – Are you looking for a one-time plan or are you looking for ongoing support? Or do you want a company to manage your finances going forward? Beyond costs, some companies specialize in one or the other.
If you’re looking for simple budgeting help and your financial situation isn’t too complicated, online services like Betterment and Wealthfront are great options. These online services offer basic budgeting tools and other entry-level financial planning options for minimal fees. They can help you create and set up a plan to achieve them.
However, if you’re looking for more in-depth help or need someone to motivate you and hold your hand, it makes more sense to find a traditional financial planner.
I equate this with choosing between online classes and school classes. Both are good options, but it depends on your own personal learning style. As a result, I’ve found that going to her financial planner, or at least spending that one-on-one time with her, makes more sense to me compared to online options.
How to find a traditional financial planner
The next question is how do you actually find a Millennial Financial Advisor? This is the hard part.
I recommend asking your friends and family first. That personal connection can help you find someone who fits your needs. As a result, you may have to search for it yourself.
We recommend starting with these two sites: Financial Planning Association and the National Association of Individual Financial AdvisersYou should also check your financial planner’s certification and make sure there are no complaints. Complaints can be reviewed on the Financial Industry Regulatory Association (FINRA) website. broker check.
Also, make sure your financial planner is a certified financial planner. You can check if you are registered as a CFP here. CFP board.
How much can you expect to pay your financial planner?
This is hard. it depends.
It depends on what kind of service you are looking for.
There are several different pricing models.
- Hourly rate: If you just want financial planning, you can expect to pay a one-time fee of $1,000 to $3,000.
- Hourly wage: If you want to create a plan and simply have questions answered, many planners will do this for an hourly rate.
- Monthly flat rate: Some financial planners now charge a flat monthly fee for their services. This is for ongoing support but has nothing to do with your assets. You will have to pay $100-$300 per month for this.
- Asset management fee: This is the “original” type of investment management fee. This is billed as a percentage of the assets managed by the financial planner. Typically 0.25% to 1.50% is common. This equates to $250 to $1,500 per year for every $100,000 under management. Robo-advisors operate on this fee structure.
- Commission-only rates: With commissions only, advisors do not charge upfront fees and receive compensation through the products and services they sell. This is typical of most insurance-driven models and some investment products. Consumers should be aware that the properties of these products may not be optimal for them.
Whichever you choose, you need a financial planner with a fully transparent fee structure (including hybrid fees that may come in the form of commissions). You should also know the total cost of all plans.
Check Out This Horror Story From A Reader: How Honest Financial Advisors Should Disclose Fees
How to Scrutinize a Financial Planner (Questions to Ask)
Hopefully, you’ve found some good potential candidates by now. It’s about scrutinizing each candidate and finding the right fit.
I think it’s important to evaluate financial planners on two key dimensions. The technical and personal aspects of their work.
For the technical stuff, make sure you:
- amount they charge. Stick to a fee-based financial planner.
- What does the rate offer in terms of hours/contacts? Is it one 2 hour meeting or is there an ongoing consultation?
- services they provide. Some planners are investment only, others are comprehensive life/estate plans. I prefer a more comprehensive planner that looks at my life as a whole, not just my portfolio.
- What do you specialize in? Some financial planners specialize in different areas, such as tax and estate planning.
- Ask for samples of their work and what you can get as a result.
Once you’ve got the technical stuff figured out, you’ll need to see how it fits in personally with your advisor. examination:
- The intimacy you feel when you are talking to that person.
- Do you work with an advisor or is it passed on to another team member?
- Are advisors really trying to understand your personal situation or are they following a general plan?
It should also be clear what their fees are, both what they pay to their advisor and what they pay as part of their investment. See this reminder on how Honest Financial Advisors disclose their fees.
final thoughts
The bottom line is that you need to familiarize yourself with your advisor and the service you are about to receive. Don’t make assumptions – ask the right questions. I don’t like paying or spending time and not feeling like I’ve put the money forward after the meeting.
Have you ever hired a financial advisor or used a virtual financial planning firm? What is your experience? Any other tips for the rest of us?