When it comes to finances you must hire someone trustworthy so you can rely on them with your financial and accounting needs. If you are searching for a financial advisor to help you with your finances, you came to the right place. Here at Savvy Financials, we will be sharing with you an article discussing the important questions to ask a financial advisor you decide to work with them. Hopefully, after reading this article, we will be able to help you find the right financial advisor for you. 

Are you searching for the right financial advisor for you and your business? Every financial advisor you interview must be asked the following questions. Check out these questions below. 

Are you a fiduciary financial advisor? 

A fiduciary is someone who holds a legal relationship of trust with their client. If you hire a fiduciary financial advisor they will be responsible for taking care of your financial assets such as money. 

The Security and Exchange Commission created the fiduciary standard that requires financial advisors will be enforced by law to prioritize the needs of their clients above anything else. This standard allows improving the loyalty, trust, and care that will help improve the client experience and make sure that the financial advisors will advocate the needs of their clients. 

Another goal of the fiduciary standard is to prevent conflicts of interest. The financial advisor must state any conflicts of interest if ever they emerge during the process. This is quite important as a financial advisor can be affected if there is a conflict of interest and it can hinder their capability to act for their client’s best interest. 

One important thing to keep in mind is the fiduciary standard can have loopholes because there is not a clear process on how to uphold and comply with it. 

Before you hire a financial advisor, you must first ask them if they are a fiduciary. Some financial advisors may serve as a fiduciary for just one aspect of the relationship but not for others. 

Some financial advisors may advertise themselves as fiduciaries, but may also serve in a lesser standard of care known as suitability standard. The suitability standard means the broker and dealer must comply and provide their recommendation products for their clients that are suitable for them. It means the recommended products are suitable solutions for the clients but it may not be in their best interest. 

Financial Performance Analysis: Savvy Financials analyzes financial performance, identifying areas for improvement and growth.

How do you know if a financial advisor is a broker operating under fiduciary or suitability standard? Some brokers or non-fiduciary financial advisors may offer a product that is suitable for their clients and may not be in their best interest. 

The fiduciary duty must be included in your conversations when searching for a potential financial advisor. 

Here are some questions that you can ask a financial advisor before you hire them to make sure that they are a pure fiduciary. 

  • Are you willing to sign the fiduciary oath?
  • How do you practice the fiduciary standard as a financial advisor?
  • Do you involve your fiduciary commitment to all aspects of the business?
  • Are you a registered representative?

What are the services that you offer? 

A financial advisor such as Savvy Financials offers accounting and financial services. Their role is to create a long-term investment strategy, compare the pros and cons of various account types, choose mutual funds, balance and check the investment portfolio, and lay down savings benchmarks to help their clients reach their long-term financial goals. 

Financial advisors can help you if you have any questions regarding investments especially if you are planning to invest some of your money and guide you to make sure you are on the right path. 

You must let your financial advisor see your whole financial picture. You must search for a financial advisor that will not only work with you so you can reach your investment goals but also weigh in your tax situation, insurance coverage, and your real estate goals. 

The right financial advisor will help you understand the different investing terms that you do not understand as well as guide you to choose the right funds that suit your needs. They can also provide debt management and sometimes they even cater real estate planning services. 

Financial advisors have the access to different resources so you can stay connected and experience ease in communicating with them. They can help you stay on track concerning your investment account performance, envision financial savings milestones, or appraise the nest egg you will need for your retirement. 

When you meet a financial advisor for the first time, you must check and ask what services and resources they will provide you. This way you can make sure that they are the right fit for you and they can help you reach your financial objectives and goals. 

What are your qualifications?

Financial advisors usually have a lot of initials behind their names. You can ask potential financial advisors regarding their education requirements, if they are accredited, have a published list of disciplinary actions, or if you can check their professional status. You can also ask if you can check the advisor’s record. 

What is your investment philosophy and how do you manage investments?

Risk Assessment and Mitigation: Savvy Financials conducts risk assessments and develops strategies to mitigate financial risks.

When hiring a financial advisor, you must make sure that you will work with someone who shares the same values as you are. You must check if their long-term investment strategy works will suit your financial needs. You will want to hire someone who will encourage you to be smart in investing. 

The right financial advisor will learn everything about you, which means they will learn your financial situation and your goals before they start creating financial strategies, financial plans, or start recommending financial products to you. Financial advisors can provide different approaches for you, such as mutual funds that have above-average returns. You must stay away from financial advisors who want you to risk your financial future by convincing you to invest in single stocks. 

A financial advisor like Savvy Financials will help you invest your finances to build your wealth and help you invest in growth stock mutual funds. You must be wise in investing; you must diversify your investments on 4 types of mutual funds such as aggressive growth, growth, growth and income, and international. 

Scalable Bookkeeping Solutions: Savvy Financials provides scalable bookkeeping solutions to accommodate your business's growth and evolving needs.

You can ask the potential financial advisor the following questions. 

  • Do they use low-cost index funds? 
  • Do they trade individual stocks?
  • What kind of investment do they participate in? Do they invest in hedge funds, gold, etc.?
  • How do they incorporate investments done in the workplace such as 401(k)?
  • Will they incorporate individual stock positions that you are not interested in selling? 
  • Do they do tax-loss harvesting or tax gain harvesting?

You can also consider asking for their sample portfolio so you can see their work. You must also check their expense ratios. 

What is your fee structure? How are you being compensated? 

Before you decide to go for a financial advisor, you must ask about their fees and compensation. Financial advisors can get paid in a lot of ways so you must ask them how they will charge you and how it works. Here are some of them.

  • Fixed fee – Fixed fee or flat fee is a pre-agreed price for the service that will be provided. For instance, you hire a financial advisor to create a financial plan which amounts to five thousand five hundred dollars. 
  • Hourly fee – Hourly fee is the hourly rate or amount the financial advisor will charge their clients for the services they will provide them.
  • Assets under management – AUM is the annual fee charged as a percentage of the investments supervised for a specific client. It is a common investment fee. 
  • Commissions – Financial advisors are also allowed to receive their commissions for some financial products such as annuities, insurance, mutual funds, etc. You can also ask your financial advisor if they will receive a commission on the products that they are recommending to you. 

Most of the time a financial advisor can use multiple fee structures and it may depend on the service they provide.  You must ask your financial advisor to discuss their fees so you will not be surprised when their bill comes at the end of the month. You must also ask the type of service they will be providing you for the fee that you will be paying them. 

Are you planning to hire a financial advisor to help you with your financial goals? If you are based in Utah, you must check out Savvy Financials. Contact us today so we can help you with your financial needs and accounting concerns. 

Are you a business owner based in Utah? You must hire a financial advisor such as Savvy Financials. We are a full-service accounting and financial firm founded in 2011. We are offering financial services like accounting, bookkeeping, taxation, financial advisory, payroll services, and consulting. If you want to hire us for our services, please contact us. You can fill up this contact form here. You must choose a trustworthy accounting and financial firm like Savvy Financials if you need help with your company’s accounting and financial needs. Contact us today! We look forward to working with you!