Good vs. great: How to get the most from your financial advisor
Working with a financial advisor can be the difference between reaching or falling short of your short- and long-term financial goals. According to a recent study from MagnifyMoney, 95% of those who work with a financial advisor believe it’s worth the money, citing investment management, achieving financial goals and getting financial advice as top reasons for working with an advisor. So, how do you How to get the most from your financial advisor?
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A common misconception from consumers is that you have to be wealthy to work with a financial advisor, which simply isn’t the case. Everyone can benefit from establishing a relationship with an experienced advisor to help you identify and reach your financial goals. Here's how to get the most from your financial advisor.
The difference between a good and a great financial advisor
A financial advisor is your champion and advocate when it comes to financial matters, including planning.
A great financial advisor will listen more than they talk. Financial advisors should be adept at asking thought-provoking questioning to understand your financial goals and then provide appropriate solutions and steps you can take to reach them. Some common financial goals include building an emergency savings, saving for retirement, planning for children’s education, risk management, estate and legacy planning, addressing debt and much more.
Financial advisors should also be able to provide an abundance of financial education and knowledge to help you feel confident with the decisions you make. While many may have a general understanding of financial planning, an experienced financial advisor will also be aware of what is happening in the world and how that could impact your finances. Additionally, the right financial advisor for you will be able to articulate this information in a way that makes sense.
Taking complex subjects and making them understandable (and even interesting) is a hallmark of a great financial advisor.
Financial advisors offer more than just advice
A financial advisor wears many hats. They can serve as your personal advocate to help you achieve and manage your financial goals, provide education on the financial planning process and be your cheerleader to help you celebrate milestones—no matter how big or small.
When selecting your financial advisor, look for more than just money smarts. Also evaluate them on how comfortable you are speaking with them and sharing personal financial details because your advisor will know the ins and outs of how you handle your finances.
What to expect when getting started with a financial advisor
Oftentimes, individuals who are new to having a financial planner don’t know what questions to ask or where to start in the planning process, which is why having a patient and experienced financial advisor is important.
How you can prepare for a financial planner
While it may seem like you can walk into a financial consultation with just your brain, it’s best to prepare. Review your income, check financial accounts and balances, document physical and investment assets, know your debt and average monthly expenses, and understand how you want your money to work for you. Additionally, write down your top questions, concerns and financial priorities. Most of all, be open to sharing your financial picture and ready yourself to take constructive feedback.
Overview of the initial consultation
At your first meeting, your advisor should explain expectations for the financial partnership. This often helps you feel more willing to participate in the process of onboarding.
Onboarding – when you set up the working relationship – generally starts with an in-depth discovery process that provides a deep dive into your existing financial situation as well as documenting what success looks like for you. Once you’ve gone through the discovery process, you can start setting goals and objectives to implement a comprehensive plan.
Financial advisors help you take the emotion out of finances.
For most people, emotions impact financial decision-making, especially in today’s economic market with concerns of inflation, recession, geopolitics, and more. Your reactions to the ever-evolving economic cycles and the tumult of stressful life experiences shape your financial future. Having someone to help you navigate through tough market cycles or life events to temper quick or rash decisions is often the difference between successful and unsuccessful investment outcomes – and is one of the differences between a good and a great advisor.
Not all financial advisors are created equal, so take time to find one who understands your life goals and is willing to provide you with a clear, well-informed point of view. A collaborative relationship forged between you and an advisor enhances the possibilities for financial success.
Author: Peter Braun is a senior vice president, wealth advisor at UMB Bank. Braun provides financial planning and custom solutions for retirement and income planning, as well as long-term care and life insurance planning based on each client’s specific goals, time horizon and current needs. Braun has been with UMB since 1989.