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Securing Your Future: 4 Tips for Choosing an Independent Financial Advisor

Securing Your Future: 4 Tips for Choosing an Independent Financial Advisor

Setting money aside for the future should be in the forefront of your mind. At some point, you will want to retire, and having a tidy sum of money will make your retirement more enjoyable. To maximize your retirement funds, having an independent financial advisor is wise. But, you should not just choose anyone. 

These four tips will help you find the best independent financial advisor to manage your money. 

  1. Know Their Rates

Financial advisors of all types expect to be paid. Those who work for financial companies earn their money through commissions and salaries. But, if you hire an independent financial advisor, you will pay them for their services. Some make money based on commissions, where they earn based on the products that your money goes into, and others get paid through fee-based products. 

Commission- and fee-based financial advisors often choose the products that earn them the most money. This type of work might not be in your best interest. Instead, you might want to look at a fee-only advisor who earns a percentage of what they manage for you. They rely on their customers to pay them, not the financial organizations where they place money. 

2. Recognize Your Needs

You might not know what type of financial needs you have, but there are usually just a few. Some people need a few hours with a financial advisor a few times per year. In this case, you will want to find a financial advisor who offers hourly consultations. 

Some people have absolutely no idea how to invest their money, so they need comprehensive planning. Advisors will help you figure out how to save for education, retirement, and more. They can help you understand how much this will cost you and how to get the most out of your money. 

The other type of financial planning involves total asset management. These are financial advisors that practically become your friend. They manage your money by investing and watching your money grow so you can get the most out of retirement. They earn their keep through fees and percentages. 

3. Check Credentials

Before you trust anyone with your money, you should always investigate their credentials. Financial advisors can have a variety of certifications, but the one to look for is the Certified Financial Planner or CFP. Earning this certification is not easy, so having it shows they are working hard to manage money and continue learning about the industry. 

You should also look at their experience and if they have had any disciplinary actions against them. After you’ve checked their credentials, the next thing you should do is to trust your gut. If you and the financial advisor get along, then that’s a plus. 

4. Check References

Many people will talk to their friends about their financial advisors. This is an industry that gets many customers through word of mouth, friendships, or business relationships. While they might get a few cold calls, financial advisors often see people who know someone who already works with the advisor.

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