A recent wealth survey showed that only 33% of Americans had created a written financial plan. 54% of these planners reported feeling “very confident” in reaching their financial goals compared with only 18% of non-planners.* Multiple studies have shown that those who create financial plans are both more confident and more capable of achieving their short and long-term financial goals.
However, creating a comprehensive financial plan is not a simple affair. It includes retirement planning, estate planning, and insurance planning. In addition, you must consider tax strategies, saving for college, and social security planning in Utah or wherever you reside. When looking at the big picture, it can seem overwhelming. And, honestly, even after hours and hours of research to figure out the best options for you and your family, you will likely still make some financial mistakes.
Because of this, working with a financial planner is essential. Financial advisors, like the ones at TrueNorth Wealth, have dedicated tens of thousands of hours to become experts in their field and have seen countless different financial scenarios. As a result, they specialize in creating comprehensive financial plans and help you achieve your goals. Additionally, an advisor will act as an objective third party to help organize your finances, keep you on track during market swings, and ensure that your investments are continuously geared toward success.
The idea of trusting someone to play this role in your finances may seem daunting. However, if you know what to look for in a financial planner, you are guaranteed to find one you trust to work alongside you as you achieve your financial goals. Here are some questions to consider as you choose a financial advisor.
How Are They Compensated?
First, it is essential to understand the different types of financial advisors and how they are each compensated for their work. There are three primary types of advisors: Commission-based, fee-based, and fee-only.
Commission-based advisors make a profit based on what they sell to you. The biggest issue here is the apparent conflict of interest; it can be hard to fully trust an advisor’s advice when they are making money from selling you products.
You pay fee-based financial advisors a flat fee for their services; however, they can still make money from the products they sell you. So, again, there is still a conflict of interest associated with this relationship.
Fee-only advisors make money only from a fee paid to them by you. This can be in the form of a flat price, hourly rate, or a percentage of asset earnings. Because of this pay structure, you can rest assured that there is no conflict of interest in the advice they give. They will not make money from selling you products; thus, it is easier to trust that they will only recommend options truly in your best interest. For this reason, we recommend finding a fee-only planner to assist in your financial planning.
Are They Fiduciary?
Fee-only planners can also be “fiduciaries.” A fiduciary is legally obligated to put their clients’ needs above their own. In looking for a fee-only financial planner, you want to ensure that they are held to the fiduciary standard. This helps confirm you are getting financial advice that truly benefits you and your family.
What Services Do They Provide?
Financial advisors offer a multitude of services, and those services vary from advisor to advisor. For example, services may include retirement planning, investment planning, estate planning, debt management, tax planning, insurance planning, and college savings planning.
In what areas are you in need of assistance? Before choosing a financial advisor, ensure that they can support you in the areas you need it most.
Is It a Good Fit?
Once you have found a fee-only fiduciary who provides the services you require, the last step is to make sure that person is a good fit for you. In the end, you want someone who you feel comfortable with and who you know will provide honest investment, tax, and other money management advice. You will also want an advisor you feel confident will help you stick to your investment plan even during a bear market. Finally, it is essential to have an advisor who can help you see clearly during those uncertain times.
At TrueNorth Wealth, we are proud to be fee-only fiduciaries and investment advisors in Utah, who always have your best interest in mind. We specialize in creating comprehensive financial plans, and we provide investment, tax, estate, insurance, and college savings planning services. Call for a consultation today.
