Financial advisors do cost money, but they can provide valuable services that can help protect or grow your wealth.
Make good communication a top priority with any financial advisor you hire
Financial advisors can provide valuable services that can help protect or grow your wealth, particularly as you encounter and plan for major life events.
Some investors seek out the services of a financial advisor because of their life situations or the complexity of their portfolios. Others are more comfortable setting their own goals and prefer trying to establish an investing plan independently. If you’re wondering whether you need a financial advisor, consider your personal circumstances, your portfolio goals, and the costs involved.
Financial advisors can play a crucial role in helping you navigate your finances during major life transitions such as marriage, divorce, or retirement—times when your income and expenses may change significantly.
You may benefit from working with a financial advisor if you’re preparing for a major expense such as paying for your child’s college education or saving for a down payment on a home. A financial advisor can help you brainstorm strategies to potentially help you save money.
Here are just a few issues that financial advisors can help you address:
If you find that your portfolio is growing more complex than you’re able to manage alone, then you may want to consider enlisting help. Although some investors have relatively straightforward portfolios with just a few holdings, others own a mix of complex assets including commodities, fixed income, and real estate and could benefit from professional management.
When you ask yourself, “Do I need a financial advisor?”, you’re likely wondering whether financial advisors are worth the cost. And cost is certainly a major factor in determining whether to hire a professional.
A number of things can affect the cost of a financial advisor. Many charge a percentage of the total assets that they manage, or assets under management (AUM). For example, if your portfolio is $1 million and the financial advisor charges a 1% fee on AUM, then you’d be paying $10,000 annually for their services.
Other financial advisors assess a flat fee. For example, they might charge $2,000 for a comprehensive financial review, or a certain amount per month for ongoing support. As you search for a financial advisor, be sure to ask about rates and how different advisors determine their fees so you can better determine if a financial advisor is worth the cost.
Keep in mind that many financial advisors require that you have a minimum amount invested, so review their terms carefully as you shop around.
If you decide that you do want a financial advisor, you can find a professional who’s right for you through several channels. Recommendations from family or friends can be a valuable place to start. If someone you trust has had a positive experience with their financial advisor, there’s a good chance you may, too. Your friend or family member can shed some light on how a particular advisor works and explain why he or she may be a good fit for your financial needs.
You can also search for a financial advisor through the TD Ameritrade AdvisorDirect® referral program. Through AdvisorDirect, TD Ameritrade can help you identify an independent Registered Investment Advisor for a face-to-face meeting and a free consultation. In a complimentary introductory meeting, you can determine how comfortable you are with a financial advisor by sharing your financial goals and learning about the advisor’s management approach.*
When assessing whether a financial advisor is right for you, make sure you’re comfortable with the way he or she communicates. Do you feel the advisor is receptive to hearing your needs and goals? If an advisor asks questions that seek to gauge your specific situation, you can take that as a good sign that she wants to help you develop a customized strategy.
Don’t be afraid to ask lots of questions when you’re vetting financial advisors. And if you don’t feel comfortable with someone, keep shopping around until you find another person who seems right for you. After all, a financial advisor can help you make some of life’s most important financial decisions and assist you in pursuing your specific goals. It’s a relationship that could last for many years, so take your time when you’re searching.
Financial advisors can play an important role in creating a healthy financial strategy. Review your own particular situation, including whether you have an impending significant life change and whether your portfolio is more complex than you’re comfortable managing.
Of course, compare the cost of hiring a financial advisor against what you believe you could do on your own. And if you do want to rely on professional advice to help you save money and avoid investing mistakes, ask family and friends for recommendations. You can also turn to services such as TD Ameritrade AdvisorDirect that can help connect you with an independent financial advisor who’s right for you.
*Minimum asset level required. There is no charge or obligation for the initial consultation with the independent advisor. You are solely responsible for evaluating any independent advisor that you are considering. Learn more.
Please note: Under no circumstances should participation by a certain independent advisor in AdvisorDirect be considered an endorsement or recommendation by TD Ameritrade for that particular independent advisor.
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