Red flags to consider when contemplating a change in financial advisors
In the world of finance, finding the right financial advisor can be a daunting task. Here are some key points to consider when choosing a financial advisor to help you manage your investments.
According to Bankrate's 2024 Financial Regrets Survey, 22 percent of Americans regret not saving for retirement early enough. This underscores the importance of having a financial advisor who can guide you through the complexities of retirement planning.
A good financial advisor should be transparent, ensuring you are confident in the value they provide. They should prioritise your needs and incorporate them into a financial plan that motivates you. If your advisor seems to be pushing certain investments, it might be due to commissions, so it's essential to look for a financial advisor who is a fiduciary, legally obligated to act in your best interest.
Quarterly reports on your portfolio and annual reports, much like publicly traded companies, should be expected from your financial advisor. If your portfolio remains flat while the S&P 500 index saw a 20 percent or greater return over the last year, it might be cause for concern.
If you don't feel like your financial advisor fights for your cause, it might be time to look elsewhere. Changing financial advisors could have tax implications, so it's important to be aware of these before making a decision.
Some financial advisors have fee-only services, where advisors are paid by clients exclusively. These advisors can offer a more unbiased approach to investing.
The best financial advisors in the United States for 2022 do not specifically recommend particular bank certificates, but top financial advisor firms such as Pathstone, J.P. Morgan Wealth Management, and firms recognized by NerdWallet include a range of services like portfolio management, financial planning, and wealth management strategies rather than focusing solely on bank certificates or CDs.
Robo-advisors, offering a ton of features at a much lower cost than a human advisor, can also be a viable option for those looking for a more cost-effective solution. However, a good human advisor should be readily available to help with financial needs, check in regularly, stay informed about changes in your portfolio, and charge fees around 1 percent or less of your assets under management (AUM).
Signs of a bad financial advisor include being unresponsive, not checking in, being inattentive, having high fees, and pushing certain investments. If you encounter any of these issues, it may be time to seek a new advisor.
In conclusion, finding the right financial advisor is crucial for managing your investments and achieving your financial goals. By considering the points outlined above, you can make an informed decision and find an advisor who will work diligently to help you reach your financial aspirations.
