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.

Couple talking to financial advisor

Understanding the role of a financial advisor

Before delving into the selection process, let's clarify the role of financial advisors. They are experienced professionals who offer personalized financial advice and investment management services, and they must complete specific training and be registered with a regulatory body in order to provide advice. Financial advisors work closely with you to understand your situation, goals, and risk tolerance, and they craft comprehensive plans to help you secure your financial future. Many have areas that they focus, and there are a variety of licenses and certifications they may have. Your individual needs will help you determine which advisor is the right one for you.

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.

What can a financial advisor do?

A skilled financial advisor can add significant value to your financial journey. He or she will assist in various areas, like:

  • Developing personalized financial plans and budgets.
  • Crafting strategies to minimize your tax burden.
  • Advising on business finances and expansion plans.
  • Planning and saving for your child's education.
  • Creating investment strategies tailored to your goals.
  • Ensuring efficient wealth management and estate planning.

How a financial advisor adds value

It's essential to understand the value a financial advisor brings 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.

First: 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.

Second: 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 analyst (CFA)
  • Certified public accountant (CPA)

 You can also check their licenses using BrokerCheck from FINRA (Financial Industry Regulatory Authority).

How much does a financial advisor cost?

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.

Third: 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 a vital step toward securing your future. By understanding your needs, researching potential advisors, and meeting with the most promising candidates, you can make an informed decision that serves your best interests. We are here to help. Eagle Strategies LLC, a New York Life Company, has financial advisors with a wide areas of focus to assist you and become a valuable partner on your journey to financial success.


Speak with a financial professional about your goals

We can answer your questions and help determine what may be right for you.

*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.