How to select a financial advisor


With a New Year comes a chance to reassess your financial goals. And if you need help on the right course to reach those goals, a financial advisor can help.

Choosing a trusted financial advisor is like hiring someone to work for you – it’s best to have a sense of who they are and what they can do up front. Are you ready to interview a potential advisor? Here are a few things to consider:

Fiduciary responsibility.

Trustees should always put your financial interests first. Non-fiduciary financial advisers are held to a lower standard for making “appropriate” recommendations. Appropriate is not the same as “in the best interest of your client”.

Ask: Are you a fiduciary?

Offered services.

Different advisors offer different services, which may include: financial and retirement

planning, portfolio management, investment planning, trust and estate planning / administration, pension services, non-profit and charitable asset management, and donor advised gift funds.

Ask: What services do you offer? Are the services you offer all-inclusive?

Compensation.

There are three main types of compensation in the world of financial advisers; fee-only, fee-based and commission-based.

Paid only: It can be a flat rate, an hourly rate or a percentage of assets under management. Fee-only means they don’t receive commissions or other payments on the sale of financial products that they recommend to customers.

Paying: Also called “fees and commissions” compensation. Unlike fee-based advisers, fee-based advisers can also earn money through commissions or brokerage fees. These fees may present potential conflicts of interest. The advisor may have a financial incentive to sell you the products on which they can earn a commission, even though that may not be the best product for you.

Commission: An advisor who works on commission receives payments from companies to sell their products to customers. If you think a financial advisor is trying to sell you something, chances are they are paid on a commission basis.

Ask: How are you paid? What is your pricing structure?

Skill.

Look for a financial consulting firm with an experienced team and reputable references. Some of the most sought-after certifications in the financial industry are: Chartered Financial Planner (CFP®), Chartered Financial Analyst (CFA®), Chartered Accountant (CPA) and Juris Doctor (JD-lawyer).

Ask: Do you hold professional titles? Does your company have a team of experienced people with different training and expertise?

As a local community bank providing trust and wealth management services, Hills Bank has served the financial planning needs of Iowa residents for decades. Want to give us an interview? Please feel free to contact one of our trusted or wealth management agents at 319-338-1522, or visit us online at hillsbank.com/wealth-management.

Investment products are not deposits, FDIC insured, or insured by any federal government agency, do not carry bank guarantees, and may lose value.

Hills Bank FDIC Member – https://www.hillsbank.com/


Back To Top