Choosing a financial advice firm to work with isn’t as simple as doing a quick Google search. It requires you to really sit down, evaluate your finances, plan your future financial goals, and research which firm will help you achieve those goals. Need some help? Here are some of the most important things to do when choosing a financial advice firm to work with.
What exactly does a financial advice firm do?
A financial advice firm provides financial planning and investment services for clients. They look at your current finances, your financial situation, and your financial goals to create a strategy that sets you up for success.
Depending on your preferred level of personalization, a wealth management firm may help with:
- Estate planning
-Retirement income planning
- Investment management
- Tax mitigation strategies
- Social Security planning
How to choose a financial advice firm
There’s a plethora of options for financial advice firms out there. How do you choose the right one? Keep in mind that you may have to pay fees for your services. As such, you want to ensure you’re getting the most bang for your buck.
Here are some key things you should do when selecting a financial advice firm to work with:
Look at each firm’s services closely
Financial advice firms, and financial advisors, offer a variety of services that work for different financial situations. That’s why it’s important to look at each advisor and firm’s services with a fine- toothcomb. Are they solely providing investment advice, or do they also provide other services like retirement and tax planning?
You should also look at the type of investments a firm helps with and specializes in. If they’re known for, say, aggressive investment strategies but you’re looking for a safer, more conservative option, you may wish to look elsewhere. Comparing services and strategies is arguably the most important thing to do.
Checkout firm’s fee and commission structure
Let’s be real: while we may wish financial advisors would work for free, they don’t. That being said, it’s important to learn how a firm’s fee and commission structure works. Why? Because it will give you insights into the firms’ and advisors’ incentives.
Some financial advisors earn commissions for the sale of financial products, while others get fees for their services. So, if they’re working on commission, they could influence you to buy products that aren’t in your best interest. While you shouldn’t assume this about a financial advisor, it’s good information to keep in the back of your mind. That way, you get a comprehensive look at the services you’re getting, and the costs associated.
Identify each firm’s target client
Understanding a firm’s target client will give you a better understanding of their motives and services. If they cater to clients with larger net worth’s, they may have different services than you’d see at a firm that caters to clients with smaller net worth’s. Some firms may even have a minimum value in assets they work with, whether it’s $30,000 or $300,000.
Identifying each firm’s target client allows you to get key insights into how the firm operates and the services they provide.
Get insights into each firm’s client and advisor relations
It’s crucial to learn about a firm’s client-advisor relations early on. Sure, you may not need to be in constant contact with your wealth advisor, but you should both set communication expectations early on. Figure out how frequently they meet with their clients, and what they typically go over in meetings. Doing this will help you and your advisor have clear guidelines to follow for meetings and other forms of communications.
Checkout a firm’s credentials
Sure, it may be impressive for a firm to handle millions upon millions of dollars, but you should look at other credentials and reviews to get a feel for how the firm best serves clients. Research what they’ve done (awards, recognitions, etc.) and where they intend to go.
While flashy recognitions aren’t everything, the certainly help back up a firm’s legitimacy and service. You can also compare the credentials of multiple firms and see which one checks all the boxes you ’relooking for.
Parting thoughts about working with a wealth management firm
Remember, you should strive to have a solid relationship with your financial advisor and firm. Don’t just settle for a firm you think will get the job done. Instead, compare firms and select one that has your best financial interests at heart and serves you—and your money—well. Together, we can work to keep you on-track towards your financial goals.
Request a consultation with us to learn more.
Read more articles by Fiduciam Financial