re you looking for a financial advisor and have no clue about where to start or how to get the right one? Well, this article has tips for finding a reliable advisor. Furthermore, Macdonald.Ventures offers the best financial advisory services. Here are ways of choosing the right advisor.
Decide What Part of Your Financial Life You Need Help With
Financial advisory services are available in different disciplines, including banking, insurance, securities trading, tax planning, and investment management. Deciding which areas you want help with will narrow down your search for a financial advisory firm. Use these questions to start the process:
- Do I need help managing my investments?
- Do I need help protecting my family’s assets in case of an emergency?
- Do I want to reduce liability or plan for future taxes?
- Do I need help choosing the best insurance coverage for my family?
- Do I need help with my debts, either consolidating them or making the most of my credit?
- Do I want to plan my finances for retirement?
The answer to these questions will help you know the areas where you need financial advisory help.
Choose Financial Advisors with Reputable Credentials
An institution’s reputation is essential, but it’s also vital to find a financial advisor with reputable credentials. The three most common designations of reputable advisors are:
- Certified Financial Planner (CFP)
- Chartered Financial Analyst (CFA)
- Certified Public Accountant (CPA).
Other professional organizations award different designations, so it’s essential to verify the company’s credentials. The Financial Industry Regulatory Authority (FINRA) provides a database to confirm an advisor’s designation.
Understand How the Financial Advisors Are Compensated
Financial advisory firms come in three types:
- Commission-based: The advisory firm gets paid for selling financial products, such as mutual funds.
- Fee-based: These arrangements are much like commission-based arrangements, but they do not require clients to purchase any products.
- Fee-only: These arrangements may be the best option for financial advisory because they put the client’s interests first and don’t conflict with product sales commissions.
Licensed Investment Advisors
Not all financial advisors are licensed, nor is licensing required by law. However, possessing a license can demonstrate an advisor’s level of expertise and knowledge, which is why it may be essential to look for one with the appropriate permits. Not only do they get access to training that others don’t get, but they can better represent clients because they are held to a higher ethical standard.
Licensing is generally offered at the national level, but some states may provide additional licensing beyond federal requirements. For example, in New York State, financial professionals must obtain a Series 63 license before charging any fees for their services. The Financial Industry Regulatory Authority administers all Series 63 licenses.
There are several other finances, insurance, and securities licenses that an advisor might have to prove his qualifications for a client. These include a Series 7 exam that qualifies the candidate to sell various securities, including stocks and mutual funds, or a Life- or Health Insurance license that would allow the advisor to sell life insurance.
The Uniform Investment Advisor Lawyer Certification provides a way for candidates to have their certification credentials recognized across all 50 states. The passing of this test signifies that the advisor has the requisite knowledge, skills, and experience to work with clients in other states.
If you are searching for a financial advisor, Macdonald Ventures has the best professionals for you. We are just a call away.