The bad news: Financial advisors are not one-size fits all, so it takes a few calls to find the right one for you. You may not need the same financial advice for all the phases of your life. So, if you find that perfect advisor, be prepared that you may change in the future.
The good news: It doesn’t have to be hard to find that right match if you are transparent in your requirements. Here are 5 categories/phrases to use up front when interviewing a financial advisor. When you are clear on your wants and needs, it will save time and likely result in referrals to the correct resource.
- Divorce: Depending on where you are in the divorce process, a generic financial advisor or money manager is not what you need. It’s possible the focus should be with a Certified Divorce Financial Analyst. A CDFA can end up being your long-term advisor, or more of a resource to get you a fair financial settlement in a tax efficient way before you start rebuilding after divorce.
- Budget/Debt/Credit Scores: If your focus is on learning to manage daily cash flow, helping structure a plan to get out of debt, and improve your credit score, say so up front. Many financial advisors do not offer this sort of advice, but there are those that do and they are fabulous. The right skill set and pricing structure is critical to building a strong financial foundation out of a debt situation.
- Cryptocurrency: If your need is someone to cheer you on or help you integrate large crypto holdings into your financial plan, look for that on a financial advisor’s website or ask in an initial call. Many advisors (me among them) don’t work with cryptocurrency trading (at least yet – it’s starting to catch on more), so it’s good to establish that right away.
- Self-Directed Investor: If you don’t want to turn your money over to a wealth manager to make trades on your behalf, say so. For many advisors, that’s the only way they interact with clients. However, if you are not comfortable making investment decisions and trades on your own, you need someone who will do it for you for a reasonable fee. Be clear when you are interviewing advisors what level of investment help you need.
- Plan vs. Invest: Many financial advisors specialize in choosing investments, managing them, and charging a fee for that ongoing service. Others don’t focus so much on what stocks to buy, but how create a plan for the flow of money to your life goals. Investment help vs. planning help seems like a silly distinction, but usually a financial advisor is not great at both.
I hope this helps when you are looking for the right fit in a financial advisor.
