When choosing a financial professional, you need to select someone who is similar to yourself. Ideally, your professional should work alongside you, helping you move toward your financial goals, and they should share your financial vision.
While looking for the right financial professional, consider working through this checklist to help ensure they meet your needs.
- Level of Personalized Services
The level of personalized services you need can vary, and it may change throughout your career. When you are young and first start investing, you may just need basic help to decide where to invest. You may want to work with someone who can help you set a strong foundation.
Over time, as your goals change and you want to take a more proactive role in your investment strategy, you may want someone you can meet over the phone or through a virtual meeting, and eventually, you may need someone you can meet in person.
As you interview financial professionals, ask what type of relationship you are going to have. For instance, can you email them questions, meet on a regular basis, or call their cell phone? Determine how much contact you can have and make sure it meets your needs.
- Fiduciary Role
Some financial professionals are fiduciaries while others are non-fiduciaries, and ultimately, you need to select the option that appeals the most to you. A fiduciary provides advice in your best interest. In contrast, a non-fiduciary suggests suitable investment products, whether or not they are ideal for your situation.
- Investment Philosophy
Before narrowing in on a financial professional, make sure you talk about their investment philosophy. While listening to their thoughts, make sure they complement your own financial philosophy.
In particular, pay attention to their risk management strategies. How are you going to minimize risk in your investments? Do they believe your risk tolerance changes as you get closer to retirement?
Also, talk about asset allocation. You need a diversified portfolio, and in addition to spreading your funds across multiple types of investments, you may also want to mix up your focus between large, medium, and small companies.
- Fee Structure and Costs
Fee structure and costs are also important to consider as you work to find someone who is similar to yourself. The fee structure can indicate how your financial professional approaches their work for you. For instance, you may prefer a financial professional who is paid a percentage of your total amount invested, an hourly fee, or another type of fee-only arrangement.
If you want to minimize fees, you may be okay with choosing a financial professional who receives a commission for selling certain investment products to you. In addition to talking about their fees, make sure you look into other costs so you can accurately assess the impact the fees are going to have on your nest egg.
- Experience with People in Your Situation
Finally, you need a financial professional who is experienced with people in your situation. When someone has been in your situation or shares elements of your current life, you may feel more comfortable working with them. Additionally, they may have insights that other professionals may not have. For instance, a female financial professional may understand the concerns you have as a woman investor.
If you own a business, for example, you want a professional who owns their own firm and understands those types of concerns. Alternatively, you may want someone accustomed to working with entrepreneurs or small business owners. In some cases, you may want someone who has experience helping people in your industry.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. The information provided is not intended to be a substitute for specific individualized tax planning or legal advice. We suggest that you consult with a qualified tax or legal advisor. LPL Financial Representatives offer access to Trust Services through The Private Trust Company N.A., an affiliate of LPL Financial.
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