By Nino Pavan, J.D., CFP®
Choosing to collaborate with a financial advisor is an essential step toward creating the financial future you dream of. Collaborating with a financial expert allows you to take advantage of strategies and possibilities you might otherwise have been unaware of. A financial advisor should be an ally and a reliable confidant you can consult for direction when faced with complex choices.
Looking for a financial advisor can be intimidating with the abundance of options—and not all of them adhering to the same ethical standards. To ensure you make the most well-informed choice, here are three criteria to keep in mind as you navigate your decision.
1. Understand the Options
There are many types of financial advisors out there, including but not limited to:
- Investment advisors
- Certified financial planners
- Financial advisors
- Financial consultants
- Portfolio and asset managers
Some overlap exists between the services different types of financial professionals offer. For example, an investment advisor might specialize in managing assets and investment advice. A certified financial planner, on the other hand, might offer comprehensive planning strategies, including asset management, to help you reach your goals.
A financial advisor’s title can’t tell you everything there is to know about his or her services, but it’s a good place to start. If you’re looking for overall financial advice, you may want to interview certified financial planners. If you’re looking for a more hands-off relationship with a financial professional who manages assets only, a portfolio manager might be a good fit.
2. Vet Credentials and Investment Philosophies
One of the most important steps you should take is vetting a prospective advisor’s credentials. The truth is, anyone can be a financial advisor, and some people don’t necessarily have the credentials or experience to do so.
As for credentials, we believe the CERTIFIED FINANCIAL PLANNER® (CFP®) designation is an important credential for advisors to carry, as this is earned after years of study, service, exams, and a demonstrated commitment to ethics. Other noteworthy credentials include the Chartered Financial Consultant (ChFC) and Chartered Financial Analyst (CFA®). Not all credentials are created equal, so make sure you know what a credential entails when you see it listed after an advisor’s name.
In addition to vetting credentials and designations, you should also consider whether a financial planner’s investment philosophy aligns with your values. You can usually find out about a financial planner’s philosophy on his or her website, but we highly recommend asking him or her directly during a consultation call.
3. Choosing a Fee-Based Fiduciary
In general terms, a fiduciary is a person or entity who has the power to act for another in situations that require complete trust. By law, a fiduciary advisor must be completely transparent and always act in his or her clients’ best interests. He or she is also obligated to avoid and disclose any potential conflicts of interest.
For most financial planning services, we recommend choosing an advisor who is a fiduciary. It’s important to note that serving a client’s best interest also extends to ongoing services and investment monitoring. That means a fiduciary advisor’s job doesn’t end after the initial meeting or purchase. He or she must regularly review your accounts to help ensure your investments continue to be in your best interest.
Additionally, we recommend partnering with an independent advisor because independent advisors run their own firms and are not tied to selling proprietary financial products that could create conflicts of interest.
Partner With a Planner Who Will Put You First
When planning for your financial future, the most important consideration is to partner with a financial planner you can trust to put your needs first. At Financial Designs, we understand that when it comes to your finances, there’s more at play than just your investments. We help you coordinate all aspects of your financial life, from tax planning to risk management. Our goal is to help you avoid financial missteps by creating a strategy that addresses potential vulnerabilities. Get in touch to schedule a no-obligation consultation by calling (909) 626 1642 or emailing email@example.com to learn more about how we can help you!
Nino Pavan is President and a CERTIFIED FINANCIAL PLANNER™ professional at Financial Designs, a financial planning firm in Claremont, California, with the mission of enabling individuals and families to financially prepare for and confidently enjoy their retirement years through goal-centered planning. With more than 25 years in the financial services industry helping families navigate the retirement process, Nino is thankful for the opportunity to serve his clients by making the retirement process a stress-free process; he worries about their money so they don’t have to.
Nino holds a Bachelor of Science in Telecommunications Management from DeVry Institute of Technology and a law degree from the University of Southern California, and is a contributing advisor to Kiplinger. In addition to being a CERTIFIED FINANCIAL PLANNER™ professional and Investment Advisor Representative, Nino has passed the Series 7, 24, and 63 securities exams and holds life and disability insurance licenses in the state of California. He also conducts retirement and estate planning workshops for employees of major California companies. Outside of the office, Nino enjoys sports (regular and fantasy), traveling (specifically tropical destinations), walking, tennis, pickleball, church activities, and spending time with his wife, Sherry, and their two children, Derek and Sara. To learn more about Nino, connect with him on LinkedIn.