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Navigating the Financial Maze: The Importance of a Financial Advisor

Posted by: Nick L. in Tips

Where do you go when you need help making important financial decisions? Do you find yourself researching financial topics on popular outlets like Reddit, YouTube and TikTok? There is a plethora of information on the internet, but should you trust the information you are getting from social media and other online outlets?  Do you feel like the idea of working with a financial advisor is old-fashioned or for people your parents’ age? With so many online resources available is there value in hiring someone to help?

Pitfalls of DIY Planning

One of the most concerning parts of using social media to research your financial planning needs is the amount of inaccurate information floating around. It can be very difficult to determine what is right and what is not.  Even some of the more notable financial gurus are often unlicensed and provide information for entertainment only. In addition, this general advice may not be what’s best for your specific needs.

Online calculators are a popular way to project how much money you will need in retirement or other basic planning concepts. While these are helpful, they are basic and don’t allow for much customization. They also depend on accurate and appropriate information to be typed in. If you miscalculate, it may provide an output that isn’t accurate or realistic.

Am I ready to see a Financial Advisor?

Perhaps you think you need a lot of money to start working with a financial advisor. While some advisors only work with people who have a lot of money, others are happy to help people build their wealth. You don’t need to feel like you don’t have enough money. Choosing to work with a professional earlier in your life can help you to achieve your goals sooner and can help you navigate situations that will arise during your saving years.

How to choose a Financial Advisor

Choosing a financial advisor is a big decision.  In doing so you are giving someone access to a very sensitive part of your life.  Remember you are hiring an expert to work with you.  Your advisor should provide value to you and your financial decisions.  Here are some things to consider when hiring a financial advisor.

  • Communication
    • It is important to find an advisor who communicates clearly and timely.  It is important that you understand and are comfortable with what is going on with your money.
  • Find a fiduciary
    •  A fiduciary is required to work in your best interest.  Today many financial professionals work for firms registered as fiduciaries, however it is possible for an advisor to be dually registered, meaning they are registered as a fiduciary and as a broker dealer.  Broker dealers are held to a suitability standard, meaning that they can recommend investments they reasonably believe are appropriate for the situation, but not necessarily the best.  By choosing an advisor who only works under a fiduciary standard, they are held to stricter rules and are required to act only in the best interest of the investor.
  • Compensation
    • Understand how the advisor gets paid.  Brokers can receive commissions on the investment products they sell.  A conflict of interest can arise when one investment product pays a commission, and another product does not.  Fiduciaries are paid by a fee billed to a client not through commission from a product sale.  This reduces conflicts of interest in investment recommendations.
  • Planning Style
    • Find someone who will take a holistic view of your finances.  Creating a portfolio is an important piece of your financial strategy, however this is only one part of your personal finances.  Find an advisor who can add value to you in other ways.  They should have a knowledge of tax laws as costly mistakes have been made by being unaware of these consequences.  Do you have enough in your emergency fund? Do you need to pay down debt or save for a large purchase such as a house?  Are you on track for retirement?  What will happen to your assets when you pass away?  This broad view will help to make sure all the pieces are working together to help you achieve your financial goals.
  • Get a Referral
    • Speak with family and friends.  See who they recommend and why. Knowing that someone you trust is working with and presumably is happy with the service the advisor provides can help make you more comfortable in moving forward.

Not all financial advisors are the same.  It is important to find someone who communicates well with you and will work with you on achieving your goals.  Taking the time to find the right advisor can yield big benefits as you build a relationship that can last for decades.

Rebecca Agamaite

Investment Advisor Representative 

Rebecca joined the firm in 2011 as an Investment Advisor Representative. In this role, she works with clients to manage their investment assets and help them obtain their financial objectives. Rebecca brings a great deal of experience to the team having worked for several years at Marshall & IIsley Bank and MetLife. She earned a Masters of Business Administration degree (with an emphasis on finance) from Concordia University.

Advisors Management Group, Inc. is a registered investment adviser whose principal office is located in Wisconsin.   Opinions expressed are those of AMG and are subject to change, not guaranteed, and should not be considered recommendations to buy or sell any security.  Past performance is no guarantee of future returns, and investing involves multiple risks, including, but not limited to, the risk of permanent losses.  Please do not send orders via e-mail as they are not binding and cannot be acted upon.  Please be advised it remains the responsibility of our clients to inform AMG of any changes in their investment objectives and/or financial situation.  This commentary is limited to the dissemination of general information pertaining to AMG’s investment advisory/management services.  Any subsequent, direct communication by AMG  with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides.  A copy of our current written disclosure statement discussing our advisory services and fees continues to remain available for your review upon request.

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