Are you looking for a financial advisor to help you manage your finances? Managing one’s finance requires dedication and discipline; hence, it’s important to engage the services of an expert to manage your money and advise you on the right investments. According to research conducted by National Financial Education Council, it’s estimated that an average American loses $1,200 per year because they lack financial knowledge. This article focuses on tips to consider when choosing a financial planner or advisor.
Decide If You Need an Advisor
Not everybody needs the services of a financial advisor, especially if one is living paycheck to paycheck. However, if one needs to start saving, it’s advisable to hire a financial expert. In most cases, financial experts are interested in working with clients whose portfolio size is reasonable since they also want to make money through commission.
Decide on the Services You Need
Apart from the costs and knowing the amount one wants to invest, it’s essential to think about the service you require from the advisor. For example, if planning for retirement, a retirement financial advisor will come in handy. In this industry, there are many specializations, including divorce financial analysts, wealth planners, and retirement specialists, among others.
Decide the Amount You Want to Pay
Financial advisors make money through commission, or fee charged either hourly, annually or on a flat rate basis; hence, financial advice comes at a cost. Human advisors charge an average commission of 1% annually, based on the size of the client’s portfolio. In contrast, robots, generally referred to as robo advisors, charge between 0.2% and 0.40% of the asset value annually; hence, it’s better to use robos if the portfolio value is small and one does not need to use the services of a human advisor.