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Financial advisors at work

Financial advisors aren’t just for millionaires. Everyone can benefit from the advice of an expert! Before you begin your search it’s a good idea to know exactly what you want help with. If you’re ready to work with an advisor, start by asking those you’re considering these questions.

What certifications do you have?

There are a variety of certified professionals who can give advice. Each has extensive financial education and is required to update this training annually. Professional credentials let you know you’re getting the best and most current advice.

The most common types of advisors are:

  • Certified Financial Planner (CFP)
  • Charter Financial Consultant (ChFC)
  • Registered Investment Advisor (RIA)
  • Certified Public Accountant (CPA)
  • Accredited Financial Counselor (AFC)

Advisors can have multiple certifications and some firms may have a team of people with specific areas of expertise working for you. This approach may be beneficial if you have any unique needs. Decide if an individual or team works best for you.

What type of experience do you have?

Many years of experience can be a good thing. Over time, the advisor may have had a chance to find solutions for a variety of situations. But, it could also mean the advisor is holding on to old habits or ideas that don’t match yours. On the other hand, newer advisors may not have worked with a variety of clients, but could offer fresher perspectives and tools.

There’s no right or wrong choice. It’s up to you to decide what mix of education and experience feels comfortable for you.

How will you help me?

Work with the advisor to pinpoint services focusing on your specific goals, financial background and individual circumstances. As your circumstances change, so will the services you need along the way. 

What’s it going to cost me?

Costs should be very clear. You don’t want to pay for something and not know exactly what you’re getting, or worse, not be sure how much you’re actually paying! Generally, advisors get paid in one of three ways:

  • General planning fee
  • Percentage based on assets they’re managing for you
  • Commissions on selling products and services

Try to determine whether the financial advisor has an incentive to sell you products and services you may not need. Whatever cost structure you agree on, get it in writing.

As an LGFCU member, there’s no charge for you to get professional help with understanding your credit report, setting goals, creating a budget and more.

When and how will we communicate?

It’s a good idea to receive routine check-ins from your advisor after setting your initial financial goals. You need to agree on when and how this will happen. A recent J.D. Power & Associates survey found clients contacted 12 or more times a year had the highest rate of satisfaction.

Your satisfaction ultimately depends on your specific situation. If you like to communicate by email or text, ask if this is possible and what restrictions they may have. Regardless of how many conversations you have throughout the year, it’s a good idea to review and revise your plan with your advisor at least once a year.

Can I have references?

Start by talking to family and friends about their experiences with financial advisors. If you don’t know anyone who has used a financial advisor, ask the prospective advisor for three references. This will give you some insight into how this advisor helped others.

Your financial advisor is an important part of your financial future. Make sure they are someone you are comfortable working with. If you have any reservations, move on.

Ready to improve your financial life? Call or visit your local branch to make a financial counseling appointment.

The advice provided is for informational purposes only. Contact a financial advisor for additional guidance.

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