Now that you’ve finally decided to work with a financial advisor, you find yourself asking, “How do I do this?” Like any important decision, you’ll want to ask questions in order to know if you want to move forward.
You wouldn’t hire a contractor without getting an estimate first, so why would you hire a financial advisor without understanding their process, who they serve, and how much they charge?
To that end, here are 10 questions to ask financial advisors to determine who you want to work with.
1. Are You a Fiduciary?
There’s a reason this is the first question—its importance cannot be overstated! An advisor who serves as a fiduciary accepts a responsibility to put his or her clients’ interests first and foremost in all decisions. A fiduciary is legally required to avoid conflicts of interest and remain unbiased in their recommendations and advice.
How can you know for certain that an advisor you’re interviewing is a fiduciary? The firm will either be listed as a Registered Investment Advisor or the advisors on the team will hold certifications that hold them to the fiduciary standard, such as the CERTIFIED FINANCIAL PLANNER™, Chartered Financial Analyst®, or Certified Public Accountant professional designations. Keep in mind, if the advisor doesn’t fit those descriptions, they may still act as a fiduciary in certain situations, like sharing a recommendation, but not necessarily when selling products.
Favor Wealth is a Registered Investment Advisory firm; as an RIA, we have a fiduciary duty to our clients. This means we’re obligated to ALWAYS act in your BEST financial interest and to offer the lowest-cost products that fit your needs.
Non-RIA financial advisors, such as broker dealers, may only have to offer you advice that is “suitable” to clients. This means they can offer financial advice that meets clients’ needs but may earn them sales commissions or higher fees.
2. Do You Hold Any Credentials?
We take credentials seriously, and we think you should too. Credentials and education play a critical role in your advisor’s competence. There are hundreds of designations in the financial services field, and some are more applicable to your needs than others.
Personally, I am a Chartered Retirement Planning Counselor℠ professional, which recognizes the knowledge and experience I have with client-centered problem-solving, as well as planning for retirement needs.
Use a designation-check database to learn more about the credentials financial advisors can earn, and ask the advisors you are researching what they do to continually hone their skills and stay up to date in the industry.
3. What Is Your Planning and Investment Philosophy?
It’s important to work with an advisor who shares a planning and investing philosophy similar to your own. Does your advisor stick to a scientific, evidence-based approach? Do they believe in buy-and-hold or do they move to cash when the market looks shaky? Talk with an advisor about how they guide clients’ investing and financial decisions.
At Favor Wealth, we know that a sound asset allocation strategy is a key factor in creating a confident financial future. Our investment strategies are customized to your unique goals and needs so you can maximize your growth while protecting your wealth.
4. How Much Do You Charge?
Financial planning and investment costs can be confusing. And too often financial advisors don’t readily disclose their fees. As fee-only advisors, our clients always know what they’re paying and what they’re receiving for their money. We want our clients to feel comfortable with their strategies and confident there are no hidden fees eating away at their hard-earned savings.
The most common way we are compensated is by an Assets Under Management (AUM) fee, which is paid monthly, based on the value of your assets. There are no other hidden costs from us and we do not earn money through commissions.
5. Who Do You Serve?
Some financial advisors focus on serving a specific demographic or level of investable assets, so you’ll want to find this out before choosing an advisor. Why is this important? Because you deserve advice and services tailored to your unique needs.
Does the firm only serve high-net-worth individuals? Or do they mostly work with small business owners or C-Suite executives? At Favor Wealth, we serve individuals and families near Pasadena, California. We believe money should serve you and not the other way around. We call it Personal Financial Management. It will change the way you think about money—one decision at a time.
6. Who Else on Your Team Will Be Working With Me?
At some firms, you may work with multiple financial advisors depending on your appointment time or needs, while other firms may pair you up with one financial advisor with whom you’ll work one-on-one. This is important to know so you can meet the other team members with whom you might be collaborating.
7. What Financial Planning Services Do You Offer?
Not all financial advisors can provide comprehensive financial planning. Some cannot sell insurance or securities, such as mutual funds or stocks, if they don’t have the appropriate licenses. Ask a financial advisor what services they provide, whether or not they have a focus, and if they offer a broad spectrum of solutions to meet your needs. When creating a plan together, be sure to ask your advisor why they are recommending particular services and solutions over others.
We at Favor Wealth offer personalized financial planning and guidance-driven investing. We don’t do cookie-cutter portfolios here. Your life is unique, your financial plan is tailored to your goals and values, so why wouldn’t your investment solutions be customized to your specific needs and preferences as well?
We use our guidance-driven investing model to create a unique investment portfolio that is right for where you are in life now with the goal of having the results you expect throughout your lifetime.
8. What Sets You Apart From Other Financial Advisors?
We know that you have plenty of options to choose from, but there are a few things that we do differently:
- We provide values-based financial planning. This means that I care about your passions and dreams, not just your wealth. What makes us different from other firms is that we don’t just talk about your goals and investments; we understand the “why” behind them.
- I spend a lot of time staying sharp as a financial advisor and entrepreneur, ultimately aiming to deliver an exceptional experience for my clients. My commitment is to deliver the highest value for clients both in investment management and client service.
- Our advice is tailored to you. We don’t give pat answers, but do the legwork to get to know you, your situation, your dreams, and your challenges.
- We build our client relationships on integrity, dependability, and accountability. We are passionate about what we do and confident in how we do it.
9. How Will I Know What My Investments Are Doing?
Your advisor will engage in a collaborative process that takes the guesswork out of investing. We offer a wide range of investments and services to help support your goals, including:
- Brokerage accounts, in which your financial advisor may make investment recommendations
- An array of investments (stocks, bonds, mutual funds, ETFs) in a coordinated portfolio allocated to your needs. Your financial advisor will provide ongoing financial advice and portfolio reviews.
- Alternative investments for accredited investors such as private real estate, private equity, hedge funds, alternative energy, and more
- Insurance solutions to help protect you and your family
- Annuity solutions that offer a combination of protection, tax deferral, and guaranteed income in retirement
- Cash management solutions to help cover your everyday essentials
Using the best technology and resources, our team will regularly monitor your portfolio to ensure you’re taken care of.
10. How Can I Know if Your Firm Is Right for Me?
When selecting your advisor, the relationship should feel right, and you should never feel pressured to make a decision quickly. We offer a complimentary consultation, where you can ask questions, evaluate our processes and services, determine if our personality is a good fit, and give you the information you need to make an informed decision.
Don’t Rush Into Anything
An advisor should be happy to answer these questions and any others you may have about how they operate. If you don’t know where to start, ask friends and family for referrals to set you down the right path.
Our Favor Wealth team takes care of our clients’ needs first and foremost and goes the extra mile to make their finances grow. To meet and see how we may be able to help, contact us today at 626-529-0445 or email Ricky directly at firstname.lastname@example.org.
Ricky Biel is founder, wealth manager and Chartered Retirement Planning Counselor℠ professional at Favor Wealth, an independent financial advisory firm serving individuals and families near Pasadena, California. Ricky Biel founded Favor Wealth with a desire to provide unbiased, client-centered, community-based financial advice. Ricky and his team of caring, smart professionals want their clients to feel like they’ve done them a favor, making it easier than ever to accomplish their financial goals by blending proven investment methodologies with creative financial technologies. He is on a mission to help his family of clients feel both a sense of relief and excitement about their future. Favor Wealth takes care of their clients’ needs first and foremost and goes the extra mile to make their clients’ finances grow. To meet and see how the Favor Wealth team may be able to help, contact them today at 626-529-0445 or email Ricky directly at email@example.com.
The commentary on this blog/website reflects the personal opinions, viewpoints and analyses of the Favor Wealth Advisors’ employees providing such comments, and should not be regarded as a description of advisory services provided by Favor Wealth Advisors or performance returns of any Favor Wealth Advisors’ Investments client. The views reflected in the commentary are subject to change at any time without notice. Nothing on this website constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Favor Wealth Advisors manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.