Finding a good financial advisor is not always easy. You have to be able to identify someone that is looking to help you reach your investing goals and someone who is only interested in enriching themselves. The best financial advisors are ones that will ask you questions and try to help you build a portfolio that meets all of your needs. They will consider everything that you need and take that into account before deciding on the best investment options for you.
The Difference Between A Good Financial Advisor And A Bad Financial Advisor
A bad financial advisor does the exact opposite. That is the type of person that is more concerned with making money off of you than making money for you. This is done by generating fees from your account. Stay away from the bad ones and find a good one. A good financial advisor is worth their weight in gold because they can make sure that you meet all of your goals.
There are a whole lot of financial advisors out there so you have to learn the difference between them all. The two basic types are commission based financial advisors and fee only financial advisors.
Commission Based Advisors
A commission based financial advisor is the traditional type of advisor. They get paid based on the percentage of sales that they generate. This can be good for the advisor but not so good for you. A commission based advisor may be motivated to sell you a bunch of products so that they can boost their total take. The result could be excess trading of your account and giving you way too many funds than you actually need. That is why it is so important to have a trustworthy advisor so you can actually put their advice to use without worrying about their motives. Ask your advisor to give you the best funds for you and ones that will actually work for you without just lining your advisor’s pockets with cash.
Fee Only Financial Advisors
Fee only financial advisors are paid a flat fee based on the services that they perform. They receive no commission and are not compensated for endorsing any product. Clients pay an hourly rate for services and use them when they need financial planning assistance. Fee only financial advisors are growing in popularity because clients like the fact that they do not receive an incentive from fund companies or brokers. This means that clients can get completely honest advice without having to worry about any conflict of interest whatsoever.
New Horizons is a fee only financial advisor that has been helping clients reach their goals since 2006.
One thing about a financial advisor you want to look for is how concerned about “you” they are. Not just you as a client or paying customer, but you as an individual. You can usually tell if the advisor genuinely cares about you.
I have truly often wondered about the motives of a financial advisor. I assumed that all advisors were commission-based. It is very comforting to learn that there are fee-only advisors out there waiting to give honest help.