John Lesser: Hi! I am John Lesser, President of Plante Moran Financial Advisors, here we discuss what to consider when choosing a financial advisor.
The first step in beginning your selection process is understanding the difference between financial planning and financial services. Services are often product driven provided by brokers and registered investment representatives.
Think of this as an a la carte approach to advising. Financial planning tends to be broader in nature. Think of this as a holistic one stop shop with complete guidance provided by financial planning professionals.
You also want to look at what the fees are for different services and what the fees will get you. A lower cost online self-service investment tool may be the right choice. Particularly, if you are just starting out, and you dont have a lot of assets or dont need a lot of personal attention.
More personalized services and more sophisticated planning dictate a higher level of fees to be paid. Make sure you understand exactly how much you are paying and what you are paying for. If you choose to work with a planner or advisor, consider whether or not they provide candid valuable advice.
For example, if you are in track to outlive your retirement income will they tell you what you need to hear or what you want to hear? Ask yourself. Is my advisor independent or do they get a commission from the investments they select?
You want to make sure their motives do not conflict with your best interests. Also, consider if the advice you are getting is holistic. Can you advisor help you understand how your investment activities fit into your overall personal balance sheet and income tax return.
Take some time to think about your needs now and research your options. Then reevaluate as you move through life and your needs evolve.
The solution that works great when you are 30 may not give you the best results when you are 50.