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Do You Need A Financial Advisor?

Why You Want to Work with a Financial Advisor 

Research from Vanguard shows that working with a financial advisor boosted investor returns by an average of 3% (net of fees). A Northwestern Mutual study found that 92% of Americans feel happiest and the most confident “when their finances are in order.” It is clear that working with an advisor is healthy for both your bottom line and your mental health, so how do you go about the search to find the right financial professional?

Know What You Want 

Every investor’s situation is unique. Before you start the search, decide if you want to manage your money or want someone else to take care of the investing responsibility. If you are having trouble sleeping at night because you are worried about the ups and downs of the stock market, working with the right discretionary money manager can provide you with some peace of mind. For complex financial needs, you will want to work with someone who offers comprehensive planning.

Asking for a Recommendation

If you decide to ask a friend, family member, colleague who they use, be sure to do your due diligence on the advisor. According to an April 2021 Facebook poll, 92% of those investors that work with a financial advisor indicated that they would recommend him or her. One poll respondent added, “I think it’s tricky recommending advisors to others. I wouldn’t want them to decide based on my recommendation.” A referral to an advisor can also come from another advisor, such as an attorney or accountant.

Referral Sites

The CFP Board maintains a listing of their registered members at LetsMakeAPlan.org. The Financial Planning Association’s membership registry is at plannersearch.org and The National Association of Personal Financial Advisors (NAPFA) maintains their list of members here: napfa.org/find-an-advisor.

Questions to Ask

If you feel apprehensive about the decision to hire someone to manage your money, schedule a meeting to see if you feel comfortable. The initial consultation should be complimentary. Asking the questions below will help you feel reassured about making the right decision.

  1. Where will the money be held? You’ll want to know that the custodian of your funds will be a large institution like Charles Schwab.  
  2. How often will I get statements? Most financial institutions will provide monthly account statements via mail or email. You may also receive quarterly performance reviews from your advisor.
  3. Can I transfer the money at any time? You may also receive quarterly performance reviews from your advisor.
  4. Are you a fiduciary? If so, who holds you to that standard? An investment adviser with a Series 65 designation is fiduciary regulated by the Securities and Exchange Commission or state securities regulator. A CERTIFIED FINANCIAL PLANNER is a fiduciary regulated by the Certified Financial Planner Board of Standards. Some other advisors may feel like a fiduciary, always acting in their clients’ best interest, but may not be required to do so by any governing body.
  5. Do you have clients like me? Some financial planning situations require specialized knowledge such as estate and tax planning for high-net-worth families, loss of a spouse through death or divorce, setting up 401(k) plans for small businesses, philanthropic planning, transitioning to retirement, or planning for a child with special needs.
  6. How will you invest my money? The answer to this question depends on various factors including, your risk tolerance, your current holdings, tax status, and goals for the investments. It may take several meetings before you get to this answer. If the advisor you are interviewing knows how he or she will invest without asking about your ability and willingness to take risk, keep looking.  

For nearly three decades, the team at Hurlow Wealth Management has helped clients find clarity, feel confident, and achieve comfort throughout the financial planning process. Schedule a FREE consultation today.  


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