Managing your finances extends beyond a checking and savings account, and includes retirement plans, investments, estates, taxes, inheritance, and more. And if that list seems slightly overwhelming, hiring a financial advisor may be exactly what you need.
Financial advisors can work with you to sort through your accounts and create a plan that helps you today, tomorrow, and in the long-term future.
To learn more about financial advisors and the type of work they do, read below.
What is a Financial Advisor?
A financial advisor is exactly what it sounds like – a professional who advises you on your finances. Some may work as independent agents, but others are employed by large financial institutions, like Fidelity, Ramsey Solutions, or local banks and credit unions. While Financial Advisor is an overarching term for the industry, there are specific types of advisors that fit different financial needs, such as investment professionals, wealth managers, and financial planners.
Each type of advisor will assess your current situation and work with you to provide short- and long-term strategies for financial success, whether that is related to your budget, investments, retirement, estate, or other financial avenues.
While some financial institutions, such as banks and credit unions, may offer free financial advisor services to their members and customers, you will likely have to pay for services at most places.
The cost of hiring a financial advisor varies depending on the services you’re seeking. Investopedia breaks down the different cost options, including:
- Charging a percentage of assets under management (typically 1%).
- Operating on a sliding scale, meaning the more business you do with the advisor, the less your fees will be.
- Charging flat fees for individual services, such as creating a tailored financial plan, or making investment recommendations.
- Charging commissions on the accounts managed.
How a Financial Advisor Can Help
Identifying the need for a financial advisor is a crucial part of financial management, and admitting you need or want help will put you on a better path moving forward. Here are a few ways that financial advisors can help you in different financial situations:
Retirement Planning
Creating goals and objectives for your future retirement can be difficult to wrap your head around. In this case, a financial advisor can help you look at your current income and projected retirement savings, and work on a plan that maximizes your contributions and efforts today that will benefit you in the future.
In addition, they can also make recommendations on other retirement income avenues, including Social Security and inheritance, and help you avoid paying penalties on retirement account access.
Estate Planning
Throughout your lifetime, you will acquire and grow assets such as bank accounts, retirement accounts, a home, vehicles, and more, and whether you’re early in your career or nearing retirement, having a plan for those assets is an important aspect of financial management.
A financial advisor – or wealth manager – can help you create a plan for assets when you’re no longer here, including will and trusts. While the financial advisor can help you figure out what should be included, an attorney will put the documents together and make sure the will and trust are aligned with rules and regulations. If you’re not sure where to find an attorney to finalize your will and trust, ask your financial advisor for recommendations in their network. Together, your financial team will ensure your plan is set for the future. To learn more about estate planning, view the Slavic401k blog.
Healthcare Planning
As you age, your healthcare expenses will continue to rise, especially if you have medical conditions. Knowing this, it’s important to plan. A financial advisor can help you figure out a budget, retirement contributions, and ways to maximize your investments to ensure you’re saving enough for medical expenses in the future.
While the costs will vary depending on your health concerns and insurance coverage, it’s important to cover your bases while you have time to prepare.
Finding a Financial Advisor
There are many financial advisors on the market, and selecting one requires some research. Anyone helping you work through your finances and create strategies for the future will be a big part of your finances for years to come, and you must find someone you can trust.
Start by interviewing several options and continue the search until you find someone that meets your requirements. Think about the certifications they have, the type of services they provide, communication methods, fees, and success rates. To view a list of interview questions to consider, visit Ramsey Solutions.
Planning for the future is not one-size-fits-all, and finding the right fit may take some time. With proper research and preparation, you will be on the right track to finding the perfect fit and will be able to set yourself up for years of financial success.
Through goal-based, wealth management services, we strive to help you financially prepare for marriage, starting a family, homeownership, opening a business, retirement and many other things you dream of. Learn more about Slavic401k wealth management and contact our financial advisors today!
