What to Expect from a Financial Advisor – The 5 C’s, Ep #134

Have you been on the fence about hiring a financial advisor? This indecisiveness can cost you. Today we’re talking through a list of attributes you should expect when looking to work with a financial advisor. We’re sharing a list of 5 C’s that you can expect when hiring a financial advisor.

4 reasons you may be looking for a financial advisor

When seeking the help of a financial advisor, you may be seeking assistance in one of several areas.

Competence – You are looking for someone who knows more than you and is an expert in their field.

Coaching – You may know quite a bit, but knowing and doing are 2 different things. A financial advisor can be like a personal trainer and give you the push you need to get things done.

Convenience -A financial advisor can do what you don’t have time for.

Continuity – You may want someone to help you coordinate with others for family or legacy planning.

Do any of these reasons seem familiar to you? Keep listening to hear what a financial planner can do to help you.

What to expect from a financial advisor

Collaboration – Your financial advisor will co-create a plan that serves you and helps you reach your financial goals. This should be a collaborative process between the two of you. In your first meeting, you can expect to be asked a lot of questions so that they can learn about you and your goals. You want your financial advisor to lead with a planning focused approach. If you receive a sales pitch instead, this should raise a red flag.

Credentials – Many people are surprised to learn that you don’t have to have any qualifications to be a financial advisor. However, you may see a bit of an alphabet soup after a financial advisor’s name. It is important to understand what these letters mean. Are they real credentials or simply sales designations? Look for the gold standard CFP certification. CFA and CPA are two other certifications that may be relevant to your situation.

Communication – You can expect regular communication from your financial advisor. They may set up a communication calendar with you to help you set expectations in communication. This regular communication will help you stay updated. Your advisor may also reach out to discuss tax opportunities, set goals, and to review progress. Listen in to hear what red flags you should look out for in your advisor communications.

Compounding value – Are you better off after you pay your advisor than you would have been otherwise? This can be hard to quantify and may take a bit of introspection. Look at your return on life as well as the quantitative parts. Consider your investment returns, rebalancing, and tax deferral. If you think that your advisor is providing a free service then make sure to look for the hidden costs in your portfolio. A fee-only financial advisor discloses their costs upfront so that there are no surprises. If you are looking for a fee-only financial advisor you can find out more about our services at FinancialSymmetry.com.

Outline of This Episode

  • The 4 reasons you may be looking for a financial advisor [2:57]
  • What to expect from a financial advisor [4:19]
  • Your financial advisor should communicate with you regularly [14:51]
  • Is your financial advisor adding value to your life? [18:51]
  • The progress principle [24:01]

Resources & People Mentioned

  • Episode 63 – Financial Acronymology, Decoded
  • Episode 108 – What the CARES Act Means for You
  • Episode 133 – Tax Planning with the New American Rescue Plan

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