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A Complete Guide to Hiring a Financial Advisor

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Hiring a Financial Advisor
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Do you have a lot of money, and you don’t know how to put it into use?

If so, then hiring a financial advisor is something you should consider. A financial advisor can help you manage your money and make intelligent decisions about how to invest it.

They’ll also be able to offer investment advice on matters like insurance, taxes, retirement planning, and how to meet your financial goals.

The benefits are endless when working with an experienced professional who knows the ins and outs of finance better than anyone else in the business.

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We know this because we work with them every day – helping people like you make smarter decisions about their finances for years now. So it’s time for you to take control of your future as well by hiring one today.

What’s a Financial Advisor?

Financial advisors are professionals that can help give guidance on all sorts of financial topics and issues. Some people like to call them “money managers,” but this is a bit of a misnomer.

That’s because financial advisors don’t manage your money; they advise you on how to go about it and then put that advice into action for you.

Working with an advisor can help you make intelligent choices that align with your long-term goals.

They can even help you figure out ways to invest your money best so that it’s working for you, not the other way around.

Who Needs a Financial Advisor?

Anyone who has complex financial needs or wants to expand their wealth should consider hiring a financial advisor to meet those needs.

They’re perfect for people who want to make intelligent decisions surrounding their money without having to do all of the research themselves.

To put it simply, if you feel like you don’t know enough about finance or investing to make sound financial choices on your own, then hiring an advisor can benefit you in more ways than one.

The Benefits

First of all, hiring a financial advisor is an excellent way to get more educated on finance.

You’ll be meeting with someone who deals with this stuff every day and has years of experience in the business.

It can help you build your knowledge base so that, in the future, you won’t need to rely on someone else to make these kinds of decisions for you.

Help You Manage Money Better

Hiring a financial advisor can help you manage your money better and make it easier to invest in the things that matter most.

They’ll be able to talk with you about all of your goals, including long-term ones like retirement, and then put together a plan to get you where you want to go.

Save Money

Thanks to their expertise, an excellent financial advisor can help you cut down on how much you spend in various areas of your life.

They might even be able to find some hidden fees that are currently costing you money with no benefit in return.

Help You Make Informed Decisions

A financial advisor can help you make more informed decisions when it comes to your money.

That might mean helping you get a better insurance deal or finding ways to cut back on taxes so that even more of your hard-earned cash stays in your pocket.

Reduces Stress

Some people worry so much about their finances that it affects other parts of their life. By hiring a financial advisor, you can reduce your stress levels and take care of some things on your own time instead.

You Get Unbiased Advice

Finally, you get unbiased advice when working with a financial advisor. That’s because they are paid on commission by the company whose products they sell, not through fees or other means that might benefit them personally.

Furthermore, this means that an advisor will always be more motivated to give you solid advice than someone who may have reasons for steering you in a particular direction.

Types of Financial Advisors

There are two broad types of financial advisors: Registered Investment Advisors (RIAs) and Brokers.

Registered Investment Advisors focus on advising clients with their best interests in mind. Unlike brokers, RIAs have a fiduciary duty to put the client’s needs first instead of their own.

Additionally, this means that if an RIA recommends a particular financial product or action, they have to prove that it will benefit the client before selling it.

Registered Investment Advisors only work on commissions from financial products that they sell.

For this reason, you can be sure that an RIA is always going to give unbiased advice because their paycheck doesn’t depend on it.

Registered Investment Advisors come with their own set of pros and cons that you’ll want to consider before hiring one.


You know that an RIA has your best interests in mind, unlike brokers mainly concerned with making money for themselves.

Also, because RIAs must act as fiduciaries, you can be sure they’ll always be looking out for your best interests rather than their own.


The commissions an RIA earns from selling financial products come with higher fees and may not align with what is best for your pocket.

Also, because of RIAs’ fiduciary responsibility, they might be reluctant to work with you if you lack the funds needed to buy financial services.

Brokers help you invest and manage your money, though their expertise is not as comprehensive as that of an RIA.

For example, brokers can advise on stocks, bonds, mutual funds, and other investments, but they don’t inform you about insurance or taxes.

Also, brokers are not required to put your best interests before their own when selling you financial products, which means they can recommend products that may be in their own best interest rather than yours.

There are also some pros and cons of hiring a broker over an RIA.


If you have a small amount of money to invest, a broker might be the better choice for you as they often work on commissions and don’t require stringent minimums like RIAs.

Also, brokers are not required to put your needs before their interests with certain investment products.


A commission-based payment means that brokers may be more motivated to sell you products from which they make the most money and not necessarily the best option for your needs.

The reason is that brokers aren’t required to put your interests before their own like RIAs are.

What Qualifications Do They Need?

Financial advisors need a lot of qualifications before they can do anything for you. For one thing, all financial advisers must be registered with the Securities and Exchange Commission (SEC) before they can even offer their services to clients.

The SEC requires registration to protect investors from irresponsible practices by financial advisers.

These requirements are there to make sure you can trust the advice given by an RIA or broker, but it also means that few people qualify to become one.

That is why you must hire an advisor who has all of their licenses in place.


The other thing to consider is education. Many professionals who offer advice on personal finances must have a bachelor’s degree.

However, some only need a high school diploma to work for specific organizations such as banks and credit unions.

Getting your financial education underway will help you better judge the quality of the advice given by any financial advisor, so it’s essential to choose one who has all of the requisite credentials.

Adequate Experience

A proper financial advisor will have years of experience in the industry and expertise that is just as extensive.

While a financial planner doesn’t need to be licensed, you might want to look for someone who has had some formal training before entering the field.

A broker can offer financial advice without any specific qualifications or license so long as they are associated with a company that has their best interests at heart.

However, it’s still essential for you to hire an advisor who at least qualifies for their licenses and other certifications.

Many companies will only employ brokers who have fulfilled the requirements set out by government organizations.

If your broker works at one of these institutions, chances are they have what you require.

Lastly, make sure to check the background of your financial advisor before signing any agreements or handing over any money. You can do this by visiting FINRA Broker Check.

When Do You Hire a One-Time or Full-Time Advisor?

It will depend on your individual needs. Most people only hire someone part-time when they need help with specific financial decisions.

For example, if you’re about to retire and want some advice on how much you should be saving each month to maintain the same lifestyle, then hiring a full-time advisor will benefit you more.

If you’re only thinking of making a single investment, then hiring a one-time advisor might be your best choice. However, a full-time financial planner will probably cost more than the advice is worth.

Questions to Ask Your Financial Advisor

Before hiring anyone and trusting them with vital information, you should ask them a few things.

Who Will Manage My Account?

Some people manage their investments, but doing so can be risky if you don’t know what you’re doing.

Hiring a financial advisor means that someone else will be making the decisions for you and managing your money accordingly.

You may want to consider hiring both a financial planner and an investment manager to get the best results.

Also, you want to make sure that any money assigned to your financial advisor will be managed by them and not someone else. Again, the answer should be clear-cut.

If it’s not, then perhaps this isn’t the right person for you, or they are unsure of their position within the company.

What Services Can You Offer?

It’s important to know what your advisor will be able to do for you. Even though they work as a team, each professional has their expertise within the field, so make sure that it aligns with your needs.

For instance, an accountant is more than qualified to prepare your annual financial statements, but they may not be the best choice to assist with investment planning.

What Is Their Hourly Rate?

You should always know how much you’re going to pay for each service before agreeing to anything.

Some advisors will decide on a flat fee for all the services at the end of a specific period.

Others will charge a low per-hour rate that changes according to the amount of work required.

When selecting an advisor, determine how they will receive compensation before getting them involved in your financial affairs.

This way, you can make an informed choice about who is best for your situation.

Top 5 Frequently Asked Questions About Hiring A Financial Advisors

Are financial advisors regulated?

Yes, they get regulated by the government and must follow specific rules set out for their protection.

That is why it’s crucial to find out who your advisor answers to before signing any agreements or handing over any money.

Is there a minimum amount that I can invest with a financial advisor?

It depends on the type of service you’re looking for and how much you want to pay for it. Some advisors will only work with a certain amount invested or saved, while others are more flexible.

It’s always best to get in touch with your potential advisor before making any agreements.

Will having a financial advisor affect my taxes?

There’s no need to worry about this; working with an accountant or tax professional does not increase your tax bill in any way.

They can often help you find ways to save money and reduce your taxable income, giving you a lower tax bill than you would have had without hiring them.

What kind of knowledge and experience do I need to become a financial advisor?

You don’t necessarily need any knowledge or experience, but, ideally, you gain some before getting started in this field.

Most advisors take courses and seminars to keep on top of changes in their field. You should do the same if you plan on becoming a financial advisor yourself.

How do I make sure that my financial advisor is trustworthy?

The best way to avoid working with a bad advisor is through research and verification. You can begin by asking friends or family for referrals or checking out online reviews.

Also, you should find the professional’s license number so you can verify it through the correct channels.

There are many different financial advisors out there, but finding the right one can be difficult.

With so much riding on your decision, you want to make sure that you’re hiring someone well qualified to work with people just like you.

Finding the right professional will give you peace of mind when it comes to your financial future.

Get Started on Hiring a Financial Advisor

Choosing a financial advisor is an important decision that requires some due diligence. Therefore, choose great service providers to avoid any frustrations or money loss.

Some great companies offer various services, including tax preparation, estate planning, bookkeeping, and business consulting. Contact the best fit today to find out more about hiring a financial advisor.

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