What to Consider When Choosing a Financial Advisor
Sorting through countless financial advisors to find one who will be an ideal fit for your family can sound like a daunting task — especially if you only have a vague idea of what you’re hoping to get out of a financial advisor.
But after working through a few key details, you and your family can identify your goals and the specific strategies to help find the advisor that’s right for you. "After all, you're not hiring someone to manage your money," says Catherine O'Malley Kearney, Director of Trust and Chief Fiduciary Officer at Key Private Bank. "You want a partner who's just as invested in your financial present and future as you are."
Let's look at some savvy but simple strategies that will help you decide which financial pros will make your short list.
How to Prepare Yourself for a Financial Advisor
Start Important Conversations About Money With Loved Ones
Financial planning should always begin long before you or your family ever meet a financial professional. By starting important conversations with your loved ones, you'll be in a better position to reach all your wealth management and transfer goals.
Conversations can include topics such as inheriting a family business, establishing trusts, or even charitable bequests you'd like to be part of your legacy. Starting those conversations can help your future advisor build strategies that support your family's needs and expectations.
Assess Your Strengths and Weaknesses
To kickstart the search for a financial advisor, partners and spouses should be frank with one another about their collective financial skill set and areas for improvement. With those in mind, you’ll want to choose a financial advisor who can complement that skill set and bring added strength to your finances.
"The truth is we're all better with some things than others when it comes to money," O'Malley Kearney says. "Partnering with a financial advisor means you don't have to be good at everything. Rather, you and your partner can take inventory of your strengths and weaknesses and use those to help guide you through the sea of financial advisors."
Consider Your Involvement
According to Accenture, boomers could transfer over $30 trillion in savings to future generations over the next 30 to 40 years. There's no shame in admitting how involved you want to be in your finances today and tomorrow.
When considering financial advisors, think about the level of involvement you'll need with your finances to feel comfortable. Before you interview potential advisors, determine if there are assets or accounts that you or your spouse would like to oversee. This will help you find an advisor who's on board with your preferences.
What to Look for in a Financial Advisor
Before you can choose an advisor to oversee your finances, you’ll need to determine what services or level of attention you’re looking for. Before scheduling an appointment, consider factors like your financial goals, desired level of involvement, and desired expertise. Whether you’re looking for a wealth manager to build up more savings or a debt manager to help settle some debt, it’s important to think about what you want or need out of a financial advisor.
Financial Credentials
Understanding what credentials to look for is another key step in finding the right financial advisor. Every finance professional has credentials that are specific to their role and area of finance. For example, Registered Investment Advisors (RIAs) or Certified Financial Planners (CFPs) are important credentials to look for. You’ll also want to research if the advisor is bound by fiduciary duty — this means that they have a legal obligation to act in their clients’ best interests. Fiduciaries will make recommendations that suit your goals, needs, and wants.
Personality and Communication Preferences
We all have preferences and quirks that become evident when working with others, including financial advisors. There's no real way to set them aside, and nor should you. "As you evaluate financial advisors, you should never feel as if you're settling," O'Malley Kearney says. "It's important to feel that you're entering into a partnership where everyone benefits."
If a trusted friend has referred you to their financial advisor, you might find that while they've achieved extraordinary results for your friends, their personality or communication style clashes with your own. For example, they may be too abrasive for your liking. Or, you might want an advisor with a jovial personality to keep pressing matters light while protecting your family and assets. Don't minimize the importance of personality and business style when making evaluations. A potential incompatibility could add unnecessary tension or even influence your financial decision making.
Make an Appointment With a Financial Advisor
After discussing your financial matters with your loved ones, determining your needs, and doing some research, it’s time to schedule an appointment with an advisor. Seek out a finance professional at your local KeyBank or ask around for a referral to a financial advising service.