Writing Your Financial Goals
Before you meet with a financial advisor, you should define what you want to achieve in terms of long-term and short-term goals. Sit down on an evening or weekend and write down your specific financial goals, whether it’s purchasing a bigger house, paying off debt, or creating a savings plan for your children’s education. It may also be helpful to identify where you want to be in five years, ten years, or even twenty years. Don’t forget to set aside money for retirement, and define goals related to how you want to spend your retirement years and how you want to provide financial support to charities in the future. This information will give better insight to the financial advisor about the financial situation you wish to achieve, and then they can help you reach it.
Finding a Financial Advisor Who Understands Your Needs
Don’t put your money with the first financial advisor you meet. Do online research, then ask others. Often, word-of-mouth is the best way to find a great financial advisor. It’s best to ask friends or relatives who have similar financial goals and strategies. This step will help you find a financial advisor that better fits your needs. You can find a financial advisor through your local bank or brokerage firm or through a professional organization like the Financial Planning Association.
Review Information About Different Financial Advisors and Investment Firms
Gather information from several advisors before deciding who you will work with. Many financial advisors require a minimum income or investments that you need to have before they will work with you. Some others may specialize in different areas, such as small business, retirement planning, or wealth management. Each firm should also disclose any fees and/or commissions that are paid to the financial advisor.
Interview Several Financial Advisors
Next, you should meet with several financial advisors before choosing one. You need to find a financial advisor you feel comfortable with, who listens to you carefully, and takes your needs seriously. You should also ensure that any financial advisor you work with is a certified financial advisor. For instance, a good financial advisor might suggest products and services to help you achieve your goals, but they should not pressure you into making certain investments.
Starting to Invest
Ultimately, you should meet with the financial advisor you chose and start investing. You and your financial advisor will look at your goals and then set an appropriate action plan to reach them. They will likely provide you with a certain amount of money you should invest monthly to work toward your goals. You may also have to cut back on expenses or commit to a budget to meet that number.
You should continue to meet with your financial advisor annually. You should also see them if you experience life changes such as getting married, having a child, or going through a divorce. Your goals may change over time, and it’s important to clearly communicate these goals with your advisor.
Other Tips: Most good financial advisors recognize the importance of having an emergency cash reserve available. This means you should have the equivalent of several months’ worth of income in a savings account that you can easily access if you lose your job or face another real emergency. This will allow you to leave the money you have invested in the market. Financial advisors should look at your financial picture comprehensively. They might offer suggestions on what percentage of your income you should invest, and they can discuss your insurance needs, risk management, and taxes. It’s important to carefully consider these suggestions, but you should feel comfortable with whatever product you choose. You should also take into account how your financial advisor is compensated. If their main payment is through commissions, you should keep that in mind when they suggest certain products and investments, as they may receive a percentage. You should fully understand the investment before you proceed. Your financial advisor should be able to explain the difference between annuities and mutual funds, as well as the risks and rate of return for each investment. If you can’t understand the investment or if your advisor doesn’t seem able to clarify it, you may want to look for a new financial advisor.
Source:
https://www.thebalancemoney.com/how-to-find-a-financial-planner-2385951
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