Originally published on MarketWatch.com
There are many reasons to hire a financial planner. Maybe you just received a large inheritance and want to use the windfall wisely. Perhaps you just started a business and need some tax planning advice. Or maybe you won the lottery and do not want to squander your sudden riches.
No matter the reason, it is important to choose the right professional. Finding a great financial planner is no easy task and making a mistake could be quite costly. Former CEO of Hainsworth Wealth Advisory in Fort Myers, Mike Hainsworth wants to help you in your search for the perfect financial profession by giving the five essential qualities you should look for.
1. A Holistic Approach to Money and finance
If you are hiring a financial advisor, you are probably concerned about the gyrations of the stock market and saving for retirement, but that is not all there is. A good financial planner knows that there is more to money than the stock market, and there is more to life than investments and retirement.
By taking a holistic approach, the best financial advisors serve their clients in many different ways. They may identify a dangerous gap in insurance coverage or a tax-saving strategy for their business-owning clients. This type of approach can be far more important than simple investing acumen.
2. Transparent Pricing
When you hire a financial advisor, you deserve to know how that individual is paid. Transparency in pricing is an essential quality in the financial services industry and one you should always insist on.
The first distinction is the one between commission-based and fee-only financial planners. The former category is far more numerous and finding a true fee-only financial planner may take some research. But if you want to avoid conflicts of interest and know the advice you receive is in your best interest, the search for a fee- planner is well worth the effort.
Whether you choose a fee-only planner or one that is commission-based, it is important to understand the payment structure. Which services will you be charged for, and how will those charges be paid? Are you charged based on the size of your account, or on the results generated in your portfolio? Always insist on the answers to these questions, and make sure you understand the responses.
3. Trustworthiness
The financial advisor you hire will be dealing with some of the most sensitive parts of your life, from how much you earn and how much you donate to charity to your plans for the education of your children. It goes without saying that you should not work with anyone you do not trust, and trustworthiness is a critical thing to look for in a financial planner.
This trustworthiness can take many forms, from the educational background of the planner to their experience to their personality traits. Seek out a planner you can get along with, one who shares your values and agrees with your approach.
4. Proactive Planning
A good financial planner does not wait for their clients to contact them. The best planners take a proactive approach to money and finance, seeking out new opportunities, asking questions learning about what their clients need and how they can achieve their goals.
This proactive outreach should not be intrusive, but it should be part of the practice. An occasional phone call or emailed article can be valuable to the client and their future.
5. A Commitment to Customer Service
In the end, the job of the financial advisor is to serve their clients. That makes a strong commitment to customer service a critical quality for the financial planning industry.
The best financial planners recognize that their success is inextricably linked to the success of their clients. They work hard to find the right investments, but they also use their knowledge to assess insurance coverage deal with tax issues and improve the finances of every client they serve.
Whether you are a DIY investor looking for a little impartial advice or a novice who needs help just getting started, the right financial planner can make a real difference. These financial professionals do more than recommend stocks and bonds – they help their clients plan for the future and chart a reasonable cost forward. Finding a financial planner who possesses the five qualities listed above will put you ahead of the game, so you can plan for the future with greater confidence.
About Mike Hainsworth:
Mike Hainsworth of Fort Myers has been serving clients in the financial sector since 1995 and has a diverse background with international experience. Working as a financial consultant from Dubai to Fort Myers, Mike Hainsworth has a proven track record of managing millions of dollars of assets, minimizing losses and maximizing the transfer of wealth from his clients to their heirs.