FAQs

1. What is a financial advisor and what do they do?

A financial advisor is a licensed professional who is tasked with providing investment advice and guidance for you based on your goals and level of risk you’re comfortable with taking. They help to bridge the gap between a complicated world of Wall Street to the regular everyday world of Main Street. They give recommendations or manage money on your behalf in accordance to what you’re wanting your investments to accomplish.

2. Is a financial planner the same as a financial advisor?

A financial advisor is a professional who advises on general financial matters. Much like a doctor or attorney, they can specialize in certain advice under the “advisor” title. A financial planner is a sub-category of a financial advisor that focuses on a comprehensive approach to your financial needs and goals through proper planning and risk mitigation.

3. What is a good rate for a financial advisor?

Generally, financial advisors that are fiduciaries act in your best interests and are compensated on an overall percentage of the amount of money they manage on your behalf or advise on. It can be a sliding scale based on the size of your total investment portfolio - but it is custom for an advisor to charge anywhere from .25% to 1% on total assets. For example, a 1% management fee on a total of $500,000 would be $5,000 per year.

4. How much money should you have before hiring a financial advisor?

Most financial advisors have minimums to ensure they will be fairly compensated for their time and will adjust their compensation percentage. It is recommended that you have a minimum of $100,000 in total assets before seeing a financial advisor.

5. Is a financial advisor worth the money?

Due to their fiduciary responsibility and management fee structure, many advisors are acting in the best interest of their clients and have the investment knowledge to make better informed decisions on your behalf. Managing and advising on the effects of behavioral finance, economic data and general understanding of investments can have a greater impact on your net worth over time. 

6. How do I choose a financial advisor or financial planner?

You should reach out to and interview prospective financial planners/advisors to see what makes each of them different. One financial planner/advisor may only work with teachers while the next solely helps executives in their local community. See if their style and expertise coincide with your situation and goals.

7. What should I ask a financial planner?

It is important to understand a financial planner’s process, what it would look like to work with them and get an idea of the level of service you’ll get. Pricing is important as you deserve to know how much you’re being charged and what you’re getting in return. Ask how they’ve helped someone in a similar situation to yours and what their philosophy is. You’ll find a lot of advisors may not line up with your goals and ambitions.

8. Should I seek an advisor before retiring?

Retirement is a major accomplishment and milestone for many Americans. Having someone to help you plan your retirement is important. It comes in many different shapes and sizes, but the goal of the advisor is to provide guidance on tax optimization, investment advice and help to comprehensively set you up for a fruitful and dignified retirement.