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Which Financial Advisor is Best for You?

June 8, 2018 | By Daniel Dewitt

For some people, one of the hardest things to do in life is to admit when they don’t know something: it’s a blow to their ego and a perceived show of vulnerability. But it’s also one of the most important and valuable things we as individuals need to learn how to do. Once you admit to not knowing something, you can proceed to gain the knowledge you’re lacking. And when it comes to financial matters, not admitting that there are gaps in your understanding of the complexities of growing your wealth can cost you dearly.

It’s no one’s fault: today’s financial landscape is more complicated than ever, and knowing where to go and who to trust for the right information and advice can be tricky. Even finding the right financial advisor for your specific needs can be a lot more complicated than it sounds. But if you’re willing to take that first step and admit you don’t know everything about your finances, we’re here to walk you through the process of finding the right financial advisor and what qualities to look for.

The Upsides of Having a Financial Advisor

Before we get started, it’s worth asking a fundamental question: what’s the point of hiring a financial in the first place? You probably have at least a general idea of what these financial experts do, but most of us have never met one in the flesh.

The primary role a financial advisor plays in your life is to help you identify financial goals and develop strategies to reach them. To achieve this, they’ll give you advice and information on budgeting, investing, saving, retiring, and risk management. Pretty much any financial decision you need to make in life a financial advisor can offer you guidance.

Not sure how much money you have coming in and going out each month? A financial advisor can compile that information quickly and conveniently and provide you with an overview of your financial health. Not sure if now’s the right time to take out an installment loan? A financial advisor can walk you through the pros and cons. They’re an invaluable resource if you feel like you don’t have a firm grip on any type of financial matter or decision.

Find The Right Flavor

Financial advisors come in as many flavors as any other profession, but are primarily separated by experience. A Certified Financial Planner (CFP) is the bare minimum certification you should look for in a financial advisor: it certifies that they have a college level education, passed an examination by the CFP Board, have at least 6,000 hours of financial experience, and passed ethic and fitness standards. Though from a different regulatory service, a Chartered Financial Consultant (ChFC) goes through a similar certification process.

A step up from a CFP is a Qualified Financial Planner (QFP). To become a QFP a financial advisor must hold credentials in several different fields, and have at least three years of professional experience. Financial advisors at this level generally have specialized knowledge in a specific area of expertise, which makes their services more costly.