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Sometimes the burden of choice can be overwhelming.
Selecting a financial advisor is like purchasing a new car in terms of the available options; however, the stakes are much higher.
Given the financial turmoil from the global pandemic of 2020, the meteoric rise in interest rates, and unprecedented inflationary pressures beginning in 2022, it is understandable why investors, both novice and experienced, are concerned about protecting their wealth and feel compelled to seek assistance from a seasoned financial advisor.
As not all financial advisors are created equal, it is important to understand the impact a financial advisor can have on your future and generational wealth.
According to a Smartasset.com survey of 160 advisors, beyond retirement planning, the value an advisor brings spans your complete financial footprint encompassing tax and legacy planning, small business needs, education savings, and debt management.
Source: SmartAsset Financial Advisor Survey
HOW A FINANCIAL ADVISOR CAN BUILD AND PROTECT YOUR WEALTH
A dedicated financial partner can help bring you closer to the future you see for yourself. Since your finances touch nearly every aspect of your life, a financial advisor can positively influence your financial well-being and that of your loved ones.
Below are five reasons to seek help from a financial advisor:
1. Expert Guidance: Crafting a plan and determining the purpose behind your money is a key role an investment advisor can play. Life is a journey, and an advisor can be a financial cartographer, helping you assess your current surroundings, your desired destination, and the most efficient way to get there. Every investor is unique, and it is critical to have a guide who can create a roadmap, provide forecasts, and navigate sharp turns or pitfalls along the way.
2. Improved Market Returns: It is understood that an investment advisor needs to prove their worth by generating investment returns. Through expert advice on things such as portfolio construction, investment selection, and tax planning (to name a few), a skilled advisor should be able to generate enhanced returns over time compared to the average investor.* Additionally, a good advisor will provide reassurance when the markets are down and caution against irrational and emotional decision-making.
3. Investment Choice: Often because an investment advisor oversees large pools of assets, they may be able to secure lower-cost investment options as well as alternative investments that are not available to individual investors.
4. Technical Expertise: While we live in a time of unprecedented information, expertise is more difficult to come across. An advisor should have deep technical knowledge of the markets and investments, portfolio rebalancing, expense management, tax legislation, tax planning, insurance, integrating your investments into your estate plan, and more. Going it alone can be costly and unforced errors and omissions can be detrimental to your financial picture.
5. Due Diligence: A financial advisor can provide ongoing and thorough research and due diligence to determine if your chosen investments will continue to be the best solution for your needs and goals.
QUESTIONS TO ASK A POTENTIAL FINANCIAL ADVISOR (OR AN EXISTING ONE)
To gain a better understanding of their approach and whether they might be the right fit for you, below are several questions to consider.
What are your qualifications?
As mentioned, not all advisors are created equal and different designations signify widely diverse levels of competence. For example, the Series 6, 7, 66, and 65, are licensing exams that allow the licensee to place certain types of trades and provide various levels of investment advice.
Other designations, such as Certified Financial PlannerTM (CFP®), signify that an advisor underwent a rigorous course of study, passed a challenging exam, must adhere to a standard of professional conduct enforced by the CFP® Board, will complete ongoing continuing education requirements, and will be held to a fiduciary standard.
The terms “advisor” and “wealth manager,” are simply words and do not indicate experience or expertise.
Are you a fiduciary?
The fiduciary standard is a legal obligation to act in a client’s best interest. Not all advisors or wealth managers are currently held to this standard. If this is meaningful to you, be sure to inquire about any fiduciary designations.
What experience do you have?
You want to know how long an advisor has been in the industry as well as what types of companies and investors they counsel. Many advisors support clients who fall within a certain asset range, so be sure this matches your financial situation. Additionally, advisors could have expertise with certain types of individuals, such as doctors or business owners.
What services do you offer?
Advisors can offer a wide array of services so take time to determine if a particular advisor can address your needs.
What is your approach to wealth management?
Make sure to understand an advisor’s wealth management philosophy and determine whether it matches your own.
Will you be the only person working with me?
Many advisors work in teams and ensuring you are comfortable with not just the advisor you initially meet, but the entirety of the team, is vital. It can also inform your experience, such as whether you are relying on the expertise of a single advisor or have access to a larger network. You might also find this notable in case your advisor retires or makes a career change.
How are you compensated for your services and how much will you charge me?
Advisors can be paid in a range of different manners (e.g., commission, assets under management, flat fee arrangements, subscription service, etc.). If your advisor is unwilling or unable to provide clear answers you can look elsewhere.
What is your organization’s ownership structure?
Understanding how an advisor’s business is owned may be important to you. For example, is it a small local business or part of a national company? Your experience could vary widely depending on which type of business you choose to work with.
In Closing
These questions are not designed to be exhaustive, but to provide a starting point, and hopefully will serve as the springboard for lively discussion about a prospective advisor’s investment and business philosophy. It is crucial to sit down with a potential advisor and make sure you ask (and they answer to your satisfaction) all the questions you desire before engaging them.
About Roehl & Yi
With more than 100 years of combined financial planning and investment experience, co-founders Tom Roehl and Jayman Yi lead a team of qualified personal wealth advisors. Our knowledge ranges from the fields of business development and financial data analysis to law and international investment banking.
Contact Roehl & Yi Investment Advisors to assist you.
Roehl & Yi Investment Advisors, LLC (“Roehl & Yi”) is an SEC-registered investment adviser located in EUGENE, OREGON. This publication should not be construed by any consumer or prospective client as Roehl & Yi’s solicitation or attempt to effect transactions in securities or the rendering of personalized investment advice. A copy of Roehl & Yi’s current written disclosure statement as set forth on Form ADV, discussing Roehl & Yi’s business operations, services, and fees is available upon written request. Roehl & Yi does not make any representations as to the accuracy, timeliness, suitability, or completeness of any information prepared by any unaffiliated third party, whether linked to or incorporated herein. All such information is provided solely for convenience purposes and all users thereof should be guided accordingly. We are neither your attorneys nor your accountants and no portion of this material should be interpreted by you as legal, accounting, or tax advice. We recommend that you seek the advice of a qualified attorney and accountant.
*Nothing herein should be construed as the provision of personalized investment advice, nor should it be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change without prior notice. Third-party data sources contained herein are for illustrative purposes only, are believed to be reliable, but we take no responsibility as to their accuracy. The brochure contains certain forward-looking statements that indicate future possibilities. Due to known and unknown risks, other uncertainties, and factors, actual results may differ materially. As such, there is no guarantee that any views and opinions expressed herein will come to pass. Investing involves risk of loss including loss of principal. Past investment performance is not a guarantee or predictor of future investment performance.
THIS IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND WITHOUT ANY WARRANTIES, EXPRESSED OR IMPLIED, REGARDING THE ACCURACY, COMPLETENESS, TIMELINESS, OR RESULTS OBTAINED FROM ANY INFORMATION WITHIN.