Contrary to popular belief, you don’t have to be a millionaire or member of the 1% to use a financial advisor. Financial planners work with people from all walks of life, offering solutions tailored to both everyday financial concerns and long-term wealth goals.
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How to choose a financial advisor
People often think financial advisors are only for the wealthy, but that isn’t true. Anyone can benefit from consulting a financial professional. A financial advisor can serve as a guiding hand and provide tailored strategies to help you achieve your goals. Here’s what you need to know to select one.
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Understanding the role of a financial advisor
Before selecting a financial advisor, it's essential to understand the value they bring to the table. People often think financial advisors give investment advice only, but their scope extends far beyond that. A qualified advisor can provide unbiased insights, provide ongoing support, and help you avoid emotional decision-making when markets fluctuate. They consider your entire financial picture and keep your long-term objectives in mind.
Who needs a financial advisor?
Financial advisors are not exclusive to high-net-worth individuals; their knowledge is beneficial to a wide range of people. Whether you're a recent college graduate, a parent of growing children, a business owner, or a person approaching retirement, a financial advisor can help you navigate complex financial decisions and optimize your resources.
How to get started
Choosing a financial advisor is an important step in your financial journey. To ensure you’re on the right track, follow these three guiding principles:
1. Assess your financial needs
Understanding your unique financial needs is a crucial first step when you begin your search for the advisor who can best support you on your financial journey. Remember, everyone's financial situation is distinct, and yours may evolve as you move through different life stages. Let's explore some common areas where a skilled advisor can provide valuable assistance:
Budgeting and financial planning—Effective budgeting lays the foundation for sound financial management. A financial advisor can help you analyze your income, expenses, and debt to create a well-structured budget. An advisor can also help you set realistic financial goals and devise strategies to achieve them.
Tax planning and optimization—Navigating the complexities of tax laws can be challenging. A skilled advisor can develop tax-efficient strategies, including maximizing deductions and making tax-deferred investments, which will help you keep more of what you earn*.
Business planning—For entrepreneurs, a financial advisor can be a valuable asset, guiding you through business finances, expansion decisions, and succession planning. Prudent guidance from an advisor can help you strike a balance between your personal financial goals and your business goals.
College planning—Investing in your child's education is a significant financial commitment. A financial advisor can recommend appropriate college savings accounts and investment options, empowering you to fund your child's education efficiently.
Investment and retirement planning—Building a comprehensive investment strategy is crucial for long-term financial security. A financial advisor will tailor investment plans that align with your risk tolerance, time horizon, and retirement goals.
Wealth management and estate planning—Preserving and growing your wealth while ensuring a smooth transfer to future generations requires careful planning. An advisor can assist in estate planning, minimizing estate taxes, and safeguarding your legacy.
2. Research potential financial advisors
Once you have a clear understanding of your financial needs, it's time to research potential advisors. Here are vital factors to consider:
Qualifications and licenses—Verify the advisor's qualifications and licenses to ensure that the advisor you pick possesses the necessary experience and knowledge. Look for one or more certifications that match your needs. Here are some common ones:
- CERTIFIED FINANCIAL PLANNER (CFP®)
- Chartered Financial Consultant (ChFC®)
- Chartered Life Underwriter (CLU®)
You can also check their licenses using BrokerCheck from FINRA (Financial Industry Regulatory Authority).
Cost and pricing structure—The cost of hiring a financial advisor can vary depending on the services provided and the fee structure. Some advisors charge an hourly rate, while others work on a flat-fee basis or for a percentage of the assets under management (AUM). It's crucial to discuss and clarify the advisor's fees during the initial consultation to ensure transparency and find a cost structure that aligns with your budget.
3. Choose a financial advisor you trust
Selecting a financial advisor is not just about qualifications; it's also about building a relationship based on trust. You should schedule an initial consultation with a few potential advisors. When you meet, have some relevant questions prepared so you can gauge their areas of focus, their communication style, and how well they understand your needs. Before finalizing your decision, carefully review the service agreement to ensure that it outlines the scope of services, compensation, and any potential conflicts of interest.
Make us a part of your team
Choosing a financial advisor is one of the most important steps in building long-term security. At Eagle Strategies LLC, a wholly-owned subsidiary of New York Life, our advisors offer more than expertise—they bring unique skills, fresh perspectives, and an unwavering dedication to your success. Our advisors work closely with you to create a plan that protects your assets, pursues growth, and helps you prepare for the future with greater confidence.
How to choose a financial advisor: FAQs
The answer to that question depends greatly on your financial acumen. While some people may have the expertise to take it on themselves, most of us could greatly benefit from the insight and guidance that an experienced financial advisor can provide.
While the cost of a financial advisor can vary greatly (depending on the size of your portfolio, the scope of their services, and the complexity of your needs), a 2023 report found that the median rate is $300 per hour. For those who charge a percentage of assets under management, the cost is usually 1% per year on portfolios of up to $1M, with the rate gradually declining on larger balances.1
In addition to the costs listed above, some financial planners will charge an annual subscription fee or individual project fees if you prefer to go that route.
Speak with a financial professional about your goals
We can answer your questions and help determine what may be right for you.
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*Neither New York Life Insurance Company, nor its agents, provides tax, legal, or accounting advice. Please consult your own tax, legal, or accounting professional before making any decisions.
1“Kitces Report: How Financial Planners Actually Do Financial Planning,” Nerd’s Eye View Kitces.com, January 2023.