Choosing the right Salt Lake City financial planner is one of the most critical decisions you will make for your family’s financial future. Select the right financial advisor, and you could have more assets for your future use. Select the wrong financial advisor, and you may have fewer assets for your future use.
As we approach 2024, there are many financial unknowns that we’ll have to consider and deal with. For instance, concerns about a 2024 recession are being discussed by financial industry influencers in the media. In addition, there are concerns about continuing inflation, rising interest rates, and volatility in the securities markets.
Finding a financial planner isn’t just about selecting the professional closest to your home or office. It’s about forming a partnership with a financial advisor who understands your circumstances, concerns, and goals.
The question posed in this article is: how do you find the right financial planner who works with clients like you?
In the article, we’ll touch on five steps you can use today to assist you in selecting the right Utah Chartered Financial Consultant® (ChFC®) who can help you pursue financial independence.
Whether you’re seeking to hire a financial advisor for the first time or looking to replace a current advisor who did not meet expectations, the decision requires a disciplined vetting process that helps you make the right decision.
Step 1. Define Your Financial Needs
Before you search for the right retirement planner, take some time to assess what you hope to accomplish through this partnership. Financial advisors offer various services, so starting with an understanding of your specific requirements is important.
Some advisors specialize in specific aspects of finance, like financial planning or investment management, while others provide comprehensive assistance, covering everything from budgets and savings goals to retirement and estate planning.
To pinpoint your financial needs, consider the following questions:
- Do you need assistance with creating a retirement plan?
- Are you seeking help with investment management?
- Do you want to create a comprehensive retirement plan?
- Do you have specific financial goals you’d like to pursue?
- Do you have a comprehensive estate plan in place?
- Do you need tax-related assistance?
- Are you interested in holistic wealth management?
- Are there charities and causes you would like to support?
Your answers to these questions will guide you in finding the most suitable financial advisor for your situation.
Step 2. Understand the Various Types of Financial Advisors
The term “financial advisor” encompasses many professionals, including investment advisors, brokers, financial planners, financial coaches, portfolio managers, and even financial therapists. That’s because just about anyone can claim to be a financial advisor. Plus, many titles in financial services do not require specific credentials – the minimum age is only 18. So, ensuring you select the right financial advisor requires due diligence.
One way to ensure your advisor has your best interests at heart is to seek a fiduciary financial advisor. These advisors are legally obligated to act in your best interest rather than their own. Ideally, you should look for a fiduciary advisor who receives compensation directly from you and does not earn commissions for selling you third-party products.
Utah financial advisors with a Chartered Financial Consultant® (ChFC®) possess the specialized expertise to provide various financial planning services. Their areas of proficiency include planning for retirement, managing estates, strategizing for taxes, and developing investment plans. Moreover, they are equipped to help manage risk and provide advice on employee benefits and various insurance products.
Step 3. Understanding How Financial Planners Are Compensated
An old saying says, “There’s no such thing as a free lunch.” Nothing could be more true when it comes to your assets. Advisors may market a product as free because they are being paid to sell you a product by a third party (mutual fund family, insurance company).
Full transparency becomes crucial for making informed decisions about working with a financial professional and managing your combined investment expenses. Understanding how the financial planner you select will be compensated and how much should be very high on your list of vetting criteria.
Fee-only advisors charge fees directly to clients for their services. These fees can be hourly, fixed, or based on assets under management. Fee-only advisors are typically viewed as having fewer potential conflicts of interest because their incomes are not tied to selling financial products or transactions.
Watch out for double dipping. That occurs when financial advisors charge a fee and a commission for the same service.
Commission-based advisors receive commissions for selling financial products such as insurance and investment products. While this may seem harmless enough, financial advisors can earn bigger commissions when they sell lower-quality products (a definite conflict of interest).
Fee-based advisors can receive fees and commissions. They charge fees for advice-driven services and receive commissions when selling third-party products. Be aware of how your advisor is compensated, mainly when the commissions are deducted from your assets.
Ideally, you will receive a written statement documenting an advisor’s potential or current conflicts of interest.
Step 4. Research the Advisor’s Background
Regardless of an advisor’s title or claims of expertise, it’s essential to investigate their credentials thoroughly: Degrees, experience, certifications, continuing education, etc. Verify any certifications or licenses they claim to hold, and check if they have a history of disciplinary issues, such as fraud or misrepresentation.
Knowledgeable investors trust what they see and not necessarily what they hear from financial advisors.
Step 5: Questions to Ask a Salt Lake City Financial Planner
Once you’ve selected a small number of financial planners to interview, it’s important that you use an objective interview process rather than a subjective one. The advisors you interview should be willing to provide you with written responses to the questions that you pose to them.
- Are you a fiduciary committed to acting in my best interest?
- How do you make money, how much, and who pays you?
- How thorough are your financial planning services?
- Are you specialized, or will you work with anyone?
- Do you have an account minimum? Is it negotiable?
- Do you have any potential conflicts of interest if you manage my assets money?
- Do you have references I can talk to?
- How often will we meet and where?
- Will you work with my other advisors, for example, my CPA and attorney?
About Scott Marsh Financial
As Utah fiduciary, fee-only financial advisors, we always commit to prioritizing your interests first and foremost. Our services are comprehensive, similar to those of a multi-family office, offering everything from financial planning to tax services under one umbrella.
We pride ourselves on keeping you continuously updated regarding your investments. With a strong focus on tax planning and tax-efficient investment strategies, you can be confident that your savings will be protected and nurtured to serve your financial objectives and help you build a lasting legacy for your family.
