Managing your money can be complicated. In addition to handling your daily expenses, student debts and job income, you may also need to manage your stock investments, real estate portfolios, annuities and life insurance. Financial consultants can provide desired financial advice, so you can make the right investments based on your financial goals. These professionals make the process easier and less stressful.
Yet, how do you select the right one for your particular needs? Here are several things to be aware of when picking a financial consultant.
What Type of Financial Consultant Do You Need?
Financial consultants offer a wide range of services based on their experience and expertise. Some financial consultants only work with people who need advice managing investments such as stocks, bonds, mutual funds and the like. Other financial consultants help people who are managing disability insurance, life insurance, health care savings accounts and annuities. Decide on what type of financial management you need to help narrow down your choices.
Fee-Only Versus Commission-Based
Some financial consultants work as fee-only advisors. This fee setup means they are not trying to sell any specific investment option for which they can acquire compensation if you decide to purchase it. A fee-only financial consultant must follow fiduciary standards to always put their client’s best interests at the forefront.
Other financial consultants may work on commission in broker-dealer firms. These consultants will obtain commission for selling certain financial products. Yet, they must perform their consultant services using ethical and moral standards where their suggestions and recommendations are always suitable to the financial objectives of their clients.
Licenses and Certifications
Due to the different types of financial consultants out there, there will be certain licenses, certifications and credentials that the consultants should have before offering their services. To pick the right financial consultant, ask to see their licenses and certifications.
For example, a financial consultant that offers securities investments will need to have a 6 series or 7 series license, although they may also have a 63 series, 65 series or 66 series license. An accountant will need to pass a CPA exam to become a licensed CPA. In addition, a financial consultant that sells insurance financial products will need to obtain a state insurance license.
Positive Financial Consultant Interaction
When picking out a financial consultant, their interaction with you is just as important as their certifications, services and pay structure. Was the financial consultant clear in what they were explaining to you and helped to clarify certain terms and lingo so you would understand? Did they listen to you as you explained your financial situation, goal or objectives?
Having a positive interaction will allow you to feel more comfortable working with that consultant. They should make you feel that they have your best interests in mind.