Finding the right financial professional for you

There are over 270,000 personal financial professionals in the United States, according to the U.S. Bureau of Labor Statistics.¹ How do you find the right one for you?

Let’s go over some criteria you should consider when searching for a financial professional.

First, define your personal financial situation

To figure out what you want from a financial professional, you first need to know your starting point. Take a look at your full financial picture. How many accounts do you have? How often do you check your balances? What is your comfort level with investing? Where would you like guidance?

You’ll want to determine how much money you need to keep liquid (aka available for withdrawal) vs. how much you can stash away for long-term investment. This gives both you and your prospective financial professional a starting point for discussions.

You’ll need to be able to share your financial goals, whether they’re for the long term, like retirement; for the medium term, like saving for a home; or something else entirely. Some financial professionals have specialties in different areas, so pinpointing your priorities could help you refine your search.

Another thing to consider is your unique relationship with money. Your background, family, environment, culture and life experiences can all affect your money views and habits. As a result, some people find comfort in working with a financial professional who shares similar experiences to their own.

What are your preferences for meeting with your financial professional?

While the stock markets still operate within traditional business hours, financial professionals’ working schedules are much more flexible. And if you’re comfortable with a virtual relationship, then you won’t be limited by geography. This may be helpful if you decide to work with a specialized advisor.

If you’re someone who prioritizes convenience, you may consider using a professional at one of the financial institutions where you are already a customer. In fact, many employers offer advice and guidance options as part of their retirement benefits for exactly this purpose. Check your employer’s program to see if this option is available to you.

How do you want to pay for advice and guidance?

There are a few different ways that financial professionals can be paid for their services. It’s a good idea to understand the different payment structures before choosing your financial professional.

• Commission-based: These financial professionals are paid commission depending on the type and amount of financial products they sell.
  • Pro: You only pay a fee when they make a transaction for you or sell you an account or product.
  • Con: There are potential conflicts of interest, as they may be tempted to sell you products with higher commissions, rather than products that are best for you.
• Fee-based: This pricing model charges an ongoing fee (usually a percentage of the portfolio they manage) but may allow the financial professional to earn commission based on sales.
  • Pro: Your fee is directly tied to how much money the financial professional manages, so they are inherently incentivized to grow your portfolio.
  • Con: You pay an ongoing fee year-round, even if you do not actively meet with them, speak with them or use their services.
• Fee-only: A financial professional can set up a fee-only model, such as an hourly fee. This removes commission-based activities entirely.
  • Pro: Clear pricing that removes potential conflicts of interest that come with commissions.
  • Con: No ongoing portfolio management. You’ll have to pay every time you want to speak with them.

Find the right alignment to build your financial confidence

Once you’ve identified your financial starting point and end goals; whether you’d like specialized guidance; and your meeting and payment preferences, you’ll be well on your way to finding a financial professional that aligns with your values and priorities. The right financial professional for you can help you feel more confident in your ability to reach your short-, medium- and long-term financial goals.