5 Tips for Selecting a Financial Advisor

Planning for retirement is an important part of being an adult — and safeguarding your future. Unfortunately, according to a survey by CNBC and Acorns, more than 75% of adults are handling major money management, including retirement planning, on their own.

For most, this will be a big mistake. That’s because when it comes to planning for retirement, a financial advisor will help you think long-term, will help you plan for your loved ones and will help protect your money and assets against market risk.

Finding a financial advisor is not always a simple task, however. To find the right person for the job, follow these tips:

1. Learn about the different types of financial advisors. 
Financial advisors are not one-size-fits-all. The different types available to work with include:

  • Online financial advisors: This service offers you virtual advice and planning. The good thing about his option is that it typically comes at a lower cost than other financial planning services.
  • Traditional advisors: These professionals may include certified financial planners, stockbrokers, and wealth managers. The relationship is typically in-person and more expensive. However, with that cost, you usually receive a tailored strategy.

2. As for referrals.
Friends and family are typically the best sources in this regard. If they come up short, however, Google is the next best source.

3. Do a background check.
Don’t be in such to hire someone that you skip the background check. He or she will be managing your money after all. There are several channels you can use to look up your potential advisor, including BrokerCheck, which is a free online service that allows users to look up how long a broker has been working in the industry and which firms they’ve worked for. The site will also tell you whether the individual has faced any consumer complaints or regulatory issues.

4. Get to know them.
Even if your potential advisor passes the background check, you shouldn’t hire them right away. Start with an introductory call. You want to ensure your personalities match, but more importantly, you will want to go into any financial advisor relationship with a thorough understanding of how they work and how they approach money management.

5. Ask about payment.
This is a big one for most consumers. During the introductory call, be sure to get a complete understanding of how much you will pay for the advisor’s services. At the same time, you should ask how the advisor likes to be paid. For example, do they work on commission, an hourly rate, a one-time fee?