Although many individuals choose to manage their money on their own, about 35% of all Americans do use a financial advisor to help them plan for their financial futures. Sometimes it may help to contact an expert in financial management to obtain guidance about how to invest and save for big items such as college education expenses and retirement.
Here are a few things to consider when choosing a financial advisor:
- What kind of background and experience does the advisor have? If you are interested in learning about specific investment vehicles, choose an advisor who has specific knowledge about different types of investment options. If you are looking for general guidance about setting up a diverse portfolio or deciding how much to save for a future financial goal, look for an advisor who has experience guiding clients in these areas.
- Ensure the financial advisor has credentials that make them trustworthy. Look for either a Certified Financial Planner (CFP) or a Registered Investment Advisor (RIA) certification. Both require that advisors put their client’s priorities first.
- Consider choosing a financial advisor who has a similar risk tolerance as you do. If you are younger and/or have fewer family responsibilities, you may want to invest in more risky options than if you have been working for many decades and have children to support.
- Ensure any advisor you choose is a good communicator and can describe financial options using simple language that you can understand. Your advisor should also be willing and able to answer any questions you may have. You want to be sure you know what you are investing in.
Sage Personal Finance 