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How to Choose a Financial Advisor

Do you feel clueless when it comes to investing? You probably know how important investing is, yet you wonder where to begin.

Many people feel this way. As a result, in 2021, around 32% of adults hired a financial advisor for help and advice.

But you’ll need to choose the right one.

Are you ready to start looking for one? Here are some tips to help you pick the right financial advisor to assist you with your investments.

Consider What Areas Need Help and Your Goals

The category of “finances” is a broad classification; it includes many different areas, focuses, and ideas. As a result, financial advisors come in different types and offer various services.

Hence, choosing a financial advisor takes time and thought. The first factor to consider is the area in which you need help. Secondly, consider your goals.

Here are some of the various categories that financial advisors assist with:

College Planning

College tuition is a hefty expense to pay. Yet, it’s also important if you have children. Unfortunately, failing to plan for this expense can leave you and your children in a predicament.

Some financial advisors offer expert help with college planning. They can help you learn the best investment tools for this purpose and create goals.

For example, you could create a goal of saving $25,000 for each child with a specific end date.

Major Purchase Planning

College tuition is one major purchase people plan for, but there are others.

For example, do you want to purchase a house in the next few years? If so, a financial advisor can assist with creating a plan to save for a down payment.

Retirement Planning (Wealth Management)

You’ll want to retire at some point, but you’ll need money saved for this time. Financial advisors know the best retirement investments to use and can help you create a plan to meet your goals.

Starting at a young age helps you save more money, giving you more time to save. Additionally, having more time to save helps you earn more through the power of compound interest.

Tax Planning

Some people turn to financial advisors for help navigating tax matters. For example, are you looking for ways to reduce your tax liability? There are investments and strategies for this purpose.

The right financial advisor for you will have the knowledge and expertise in the finance area you need assistance with.

Learn About the Types of Financial Advisors

As you can imagine, every financial advisor has a specific specialty or focus. Additionally, there are different types of financial advisors, and you’ll need to find the right type.

Here are some types you’ll discover as you search for one to hire:

Investment Advisor

An investment advisor provides advice and suggestions to help people determine what investments to use. They also assist with goal setting and explaining various investment options.


Brokers are financial advisors who actually help you buy and sell investments. Brokers have multiple licenses that allow them to buy and sell on a customer’s behalf.

Portfolio Manager

A portfolio manager is helpful for people who need wealth-management services. Portfolio managers advise people on large portfolios, assisting with increasing their profits and minimizing their taxes.

Research an Advisor’s Background

You might have a few companies on your list, and you can take your research further. For example, you can search for financial advisors online.

You’ll learn more about their credentials, experience, and services when you search online. In addition, you’ll discover what they specialize in and how people view them.

Understand the Costs

Financial advisors have to earn a living, but how they charge fees varies. Thus, you should find out the costs of hiring one.

Most advisors use an asset-based fee structure, which amounts to fees based on a person’s wealth. This is what we call the “AUM,” or asset under management model with the typical fee of 1% on all managed assets, and usually a fee minimum is applied.

You can ask a financial advisor about their fee structure if you have questions. After all, you’ll want one you can afford.

Interview a Financial Advisor

Finally, it might be helpful to contact a financial advisor to speak with them. You might even schedule a consultation appointment to meet face-to-face. It’s important to connect with your prospective advisor on a personal level since they’ll be making planning and investment recommendations that will impact you and your family.

Interviewing a financial advisor can help you determine if you trust them and feel confident in their abilities. It also helps you find one you can work with, as you can see their personality when talking to them.

Learn More About Financial Services

Financial planning and investing early in life is the key to long-term financial success.  Columbus Street Financial Planning partners with young professionals, mid-career executives, and high net worth retirees to build financial plans and portfolios customized to your values and risk tolerance that meet your long-term goals. 

Contact us at Columbus Street Financial Planning  to learn how we combine financial planning and comprehensive wealth management into one, flat, transparent fee.

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