May Friday Focus – Pulling the Curtain on Financial Advisors
May Friday Focus – Pulling the Curtain on Financial Advisors
Pulling the Curtain on Financial Advisors
What is a financial advisor? Who are financial advisors? Are financial advisors important especially in today’s world with robo investing and online platforms?
What exactly do financial advisors do, and why are they essential?
Join me as we unravel the intricacies of this profession, exploring different licenses, fee structures, and how to find the right advisor for your needs.
Understanding the Broad Spectrum of Financial Advisors:
Diving into License Types and Standards:
Deciphering Fee Structures:
Concern – an advisor is paid more by using certain fund families. American Funds is a great example of this, often incentivizing advisors or brokerage firms to use their funds. But that doesn’t mean that is always the best solution for you.
Benefit- an advisor who works with both red and green money. There are many times when both red and green money should be part of a portfolio, but green money is only commission-based. (click here to learn about the colors of money)
Commission-based advisors earn compensation through the sale of financial products, such as insurance policies or annuities.
Bottom line – when working with red only money, fees and commissions can blurry the waters, a fee-only advisor is more transparent. However, if some green money is also desired or part of the plan, then that portion is always paid through commissions. Transparency from your advisor on how they are paid is important.
Finding the Right Fit:
With the plethora of financial advisors available, finding the right fit for your unique needs can be daunting. Asking the right questions and understanding an advisor’s process and expertise is paramount. Consider inquiring about their experience working with clients in similar life stages or financial situations. Understanding their investment philosophy, risk management strategies, and approach to financial planning can provide insight into their suitability for your needs. Moreover, clarity on fee structures and potential conflicts of interest ensures transparency and fosters trust between clients and advisors.
Navigating the realm of financial advisors requires diligence and discernment. By understanding the various license types, fee structures, and standards of practice, individuals can make informed decisions when selecting an advisor. Whether seeking assistance with retirement planning, investment management, or estate planning, finding the right advisor is crucial for achieving financial goals and securing peace of mind. Remember, clarity, transparency, and alignment with your objectives are key when embarking on this journey of financial partnership.
Bonus – Questions to Ask a Financial Advisor
If answers are not clear or easy to understand, if there are more financial jargon and unrelated stories than real answers, that is a cause for caution.
1) Who are your main clients? What do you specialize in?
2) What ongoing, professional training do you take in financial and retirement planning?
3) How are you paid?
4) How do you stay current on key investment products, tools, and new retirement plan tax and distribution rules?
5) What are my best investment choices? How do you determine the best options for me?
6) How do you take the tax consequences into account for my investments?
7) What are key events that would trigger a need to review my total financial picture?
8) Who do you turn to when you have questions on financial, legal, or tax matters? (No one can know it all.)
9) Do you have someone in place to implement my wealth accumulation and retirement distribution plan if something happens to you? Who?
Please feel free to ask us any and all of these questions!
If you’d like to schedule a personal one-on-one call with Michelle, click HERE to access Michelle’s calendar and schedule a day and time that is convenient for you.
We serve clients in Mineral Point WI, Dodgeville WI, Platteville WI, Lancaster WI, Fennimore WI, Boscobel WI, Richland Center WI, Muscoda WI, Spring Green WI, Mazomanie WI, Sauk City WI, Middleton WI, Madison WI, Fitchburg WI, Verona WI, Mount Horeb WI, Barneveld WI, New Glarus WI, Monroe WI, Belleville WI, Oregon WI, Stoughton WI, Darlington WI, Cuba City WI, Hazel Green WI, Belmont WI, Dubuque IA, Freeport IL
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