4 Things Millennials Should Look for When Choosing a Financial Advisor

Thinking about working with a financial advisor, but not sure how to choose the right one? Trying to find a financial professional can be tough, because there are no rules regulating terms like “financial planner” or “advisor.” Anyone can call themselves a planner, regardless of their knowledge, skills, or experience.

It’s important, then, that you choose wisely. Be on the lookout for these 4 things when choosing a financial advisor to help manage your money and grow your wealth:

Find a Fiduciary

The most important thing to look for when seeking professional financial help is whether the advisor will act as your fiduciary. A fiduciary is someone who promises to work in your best interest and will put your needs ahead of their own.

Financial advisors can sign what’s called a fiduciary oath, so that their recommendations and advice for you are all bound to that code of ethics. If a financial advisor refuses to sign a fiduciary oath for you, find another planner.

Understand How the Advisor Receives Compensation

You also need to know how any financial advisor you want to work with gets paid. Many advisors are fee-based, while others are fee-only.

Fee-based advisors may receive commissions off sales of products like insurance or investments. This can present a conflict of interest. Your advisor may be encouraged to recommend something you don’t need because that’s the only way they’ll receive compensation.

Fee-only advisors, on the other hand, are exactly that: they only receive compensation from the fees that they charge for their financial planning recommendations and advice. They don’t sell products and they don’t earn commissions by managing your assets.

Look for Certifications and Experience

Anyone can call themselves a financial planner or advisor – but only a professional who underwent extensive training and continuing education can say they’re a CFP®. Don’t be afraid to ask a financial planner about their background, experience, and certifications.

You may know an excellent CPA or someone with a finance degree and years of experience in a financial field, but that doesn’t automatically mean they understand how to create personalized plans for managing and growing your wealth.

A CFP®, on the other hand, has been specially trained for just that. Certified Financial Planners® earned their designations after taking coursework, racking up practical experience, and passing exams. They’re also required to take additional courses and trainings to maintain their certification.

Connect with Someone Who Understands Your Needs and Goals

Finally, it’s important that you connect with a financial advisor who can relate to your needs, wants, values, and goals. An advisor can help you create a personalized plan to build wealth. They can work with you to create a road map to achieving your biggest financial goals.

But this will be difficult if you’re not on the same page. If you’re in your 20s and 30s, don’t try to work with a planner who specializes in helping retirees make the most of their nest eggs. The best way to develop solutions to your financial concerns is to work with those who understand the problem. Seek out an advisor who can relate to your experiences and is eager to grow with you on the path to financial success. Don’t settle for someone who only wants to help once you’ve already made it.

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