How would you manage your money and construct your financial plan if time and knowledge weren’t an obstacle? That is the question you need to ask yourself when seeking a financial expert’s help. Ideally, you want someone who has expertise working with someone like you.
There’s a wide array of professionals willing to offer financial advice. The formal difference among professionals in the financial industry is the fiduciary standard to which they adhere to. Registered Investment Advisers have a fiduciary duty to their clients, meaning they must make decisions that are in the client’s best interests. Other professionals like brokers, agents and registered representatives only have a suitability standard, meaning they only have to recommend or sell products that are suitable for you. That suitability could be arbitrarily based on age or some other factor that doesn’t take into consideration your financial situation or your life goals.
Often, the first place to start is with a common objective of finding someone you trust. After all, it is your money, your security and your future you are trusting this person with. Many times a recommendation comes from family, friends or colleagues. You should seek a financial adviser whose model client sounds very similar to your situation in terms of age, stage of life and asset level.
While a majority of the financial professionals do not act inappropriately, it is still important to ask how the professional is compensated. Any financial expert you are considering working with should be willing to clearly explain all fees you will pay to him or his firm, and all expenses you will pay that are associated with any investment they recommend. You should ask about any fees built into the products you buy from your adviser, as this may alert you to any potential conflicts of interest.
Generally a Registered Investment Adviser will sell a plan for your future, rather than a product. Given the approach many practitioners take selling financial products, the features and benefits may sound like a financial plan; however, products only factor how your money as it is invested in the instrument itself. A financial plan is often filled with multiple investment products that fulfill specific needs. They should be used appropriately, wisely, and in context of your overall plan.
It is perfectly acceptable to ask the expert you are interested in working with to explain a concept to you. You want someone who can explain financial concepts to you in language you can understand. You may consider questions like, “How do you determine how much of my money should be in stocks versus bonds?”, “How do you determine how much money I can safely withdraw each year without depleting my assets?”, or “What assumptions do you use when running retirement planning projections?” You should learn about a potential adviser’s investment style, qualifications, expertise, and how each conducts business through these question.
To add further to the confusion, a professional planner’s designations can often look like alphabet soup. There are more than 100 designations or certifications available for financial experts. Obtaining one of these doesn’t always indicate the individual has a degree from an accredited college or university. Designations most often indicate that the individual has passed specific exams and is obligated to adhere to ethical standards.
Before you sign an advisory agreement, you should check the history of your financial adviser by reading the adviser’s form ADV Part 2, and researching the individual or firm at www.adviserinfo.sec.gov and FINRA Broker Check® websites to examine professional backgrounds, state licensing or whether the individual or firm has been sanctioned by securities regulators for violations of investment-related regulation(s) or statute(s).
If you would like to speak with one of the financial planners at Henssler Financial:
- Experts Request Form
- Email: experts@henssler.com
- Phone: 770-429-9166.
Disclosures
This article is meant to provide valuable background information on particular investments, NOT a recommendation to buy. The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing. Henssler is not licensed to offer or sell insurance products, and this overview is not to be construed as an offer to purchase any insurance products.
