Now is a great time to get your financial house in order. The market, according to some, is starting to rebound. Even if it isn’t, the events of the last 18 months should have taught all of us a lesson: save more, and use credit less. Many of us could benefit from sound financial advice. The first thing you will need to do is find the best financial advice you can.
While getting help trying to unravel complicated financial choices you have to remember that ultimately the decisions you make have to be your own. Only you can make the best choices for your overall, long term financial health. Any advice you receive should be taken as just that: advice. Not gospel or fact, just someone’s opinion for you to consider.
Before settling on an advisor here are some things you can keep in mind. These tips will help you pick a good advisor and, hopefully, avoid falling into the trap of trusting someone who isn’t qualified to give you financial advice.
1. What credentials does the advisor have? Many times an advisor will be what is called a ‘tied agent’. That means that they can only sell the products and services of one company. That doesn’t mean they can’t help you but if they are tied to only one company they will be limited in the products they suggest to you and they will obviously not offer you unbiased information.
They are duty bound to show you which of their products are best for you, they don’t necessarily have to tell you that none of the products their company provides is a good fit for you and your goals and that XYZ company actually has something that may work better for you.
2. How does the financial planner make their money? It’s almost always in the form of a commission or fees. That means if they don’t sell you something, they don’t make any money. Make sure you know what the total fees and commissions will come to. Sometimes they will receive multiple fees for various transactions, that can really add up…for you.
3. Fiduciary. This funny sounding word is very important to your financial health. A planner who accepts fiduciary responsibility means they are obligated under the law to act in your best interests. Anyone who doesn’t accept this responsibility is just saying that they will try to act in a way that doesn’t hurt you.
4. Will the financial planner help you with every aspect of your financial plan? That would entail everything from having adequate insurance coverage, to investment choices and estate planning. There are many elements to your financial health and a good advisor should be able to help with all of them and provide you with a comprehensive plan.
When looking for the best financial advice it’s important to keep the above list in mind. The whole process can seem overwhelming and while it’s important to enlist the help of a professional it’s even more important to never forget it’s your money and your future. You need to be an attentive co-pilot on this little journey!