Jason Vanclef

How to Choose a Financial Consultant?

Hiring a financial consultant can completely shift your approach to money management. The right financial consultant can help you manage your funds, develop a solid savings and spending plan for the future, and make the most profitable investments. If you’re looking to hire a financial consultant, consider the following tips:

1. Understand the Different Types of Financial Consultants

If this is your first foray into the world of professional financial planning, it’s important to learn the differences between various types of consultants. Most financial consultants offer a bevvy of services like investment management, financial planning, retirement income planning, wealth accumulation, and more. Assess your financial needs and your particular situation to determine what financial services you will benefit the most from.

In the world of financial consulting, you’ll see that there are three types of services offered: financial planning, investment advisory services, and retirement income planning. While financial planning centers on every aspect of your finances, investment advisory services focus on investment management functions and retirement income planning focuses on coordinating pensions, taxes, Social Security, and more.

2. Check Each Consultants’ Credentials

The next step in selecting a financial consultant is to analyze their credentials. When it comes to financial consulting, all credentials aren’t the same. Jason Vanclef warns that certain organizations create credentials that are easy for anyone to acquire. Be sure your financial planner has reputable credentials like a Personal Financial Specialist or a Certified Financial Planner. These credentials prove that your consultant has demonstrated proficiency in financial management and advising.

These hard-earned credentials must be obtained by passing an exam. To maintain these credentials, advisors have to uphold an ethics policy while they also meet requirements for continuing education. As you vet your various financial advising candidates, you can also check the National Association of Personal Financial Advisors as they require consultants to obtain additional continuing education credits.

3. Understand How Consultants Are Compensated

As financial consultants don’t have to work with their clients on a day-to-day basis, many have their own methods of compensation. Jason Vanclef shares that the most objective advisors work by fee-only. Fee-only advisors only get paid according to their previously agreed-upon fees and aren’t allowed to accept incentives or kickbacks from their company.

Though many experts recommend working with fee-only advisors, it’s important to consider these methods of compensation based on your needs. To illustrate, clients that are purchasing investments may benefit from paying a financial consultant by the commission.

4. Use a Financial Advisor Search Engine

Though your first instinct when searching for a financial advisor may be to consult Google, there are better ways to find a financial advisor on the Internet. As you look for the right financial consultant, look through specific search engines that narrow down your search by ZIP code. Search engines from the Financial Planning Association, Boomerater, NAPFA, Paladin Registry, and more will all point you in the direction of qualified advisors. As most of these search engines only include certified financial professionals, you’re guaranteed that these individuals are already vetted.

5. Ask the Right Questions

Don’t forget that your search for a financial consultant is still a job interview. Avoid hiring a financial consultant without first asking a series of pertinent questions. Make sure your interview questions include asking them about their areas of expertise, a profile of their ideal client, and their preferred methods for communication.

Be sure you’re making the smartest decisions when it comes to your finances by working with a professional financial consultant. The best financial consultant will make sure you’re set up for future financial success

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