Financial advisor in her office

Key Questions to Ask When Choosing a Financial Advisor

Financial advisor in her office

Choosing a financial advisor is a vital step toward securing your financial future. Whether you’re planning for retirement, managing investments, or seeking guidance on tax strategies, finding the right advisor is essential. You’ll want to make an informed decision, so it’s crucial to ask key questions that delve into the advisor’s approach, qualifications, and commitment to your financial well-being.

At HighPoint Advisors, LLC, we provide a wide range of financial services to clients in central New York, Syracuse, and beyond. Here are 7 examples of things you may want to consider when selecting a financial advisor:

Is the Advisor a Fiduciary?

Understanding whether your potential advisor is a fiduciary is fundamental. A fiduciary is legally obligated to act in your best interest, putting your financial well-being ahead of their own. This is important when considering what products or financial services are right for you. This commitment ensures the advice you receive is professional and tailored to your specific needs.

What Is the Fee Structure?

Clarity on how the financial advisor is compensated is another important variable for your financial planning. Different advisors have various fee structures, including hourly fees, flat or modular fees, or a percentage of assets under management (AUM). Ensure you understand how fees are calculated, as well as how often fees are collected. And be wary of hidden charges that might impact your overall returns.

What are the Costs for the Services?

Beyond the advisor’s fees, inquire about any additional costs associated with the services provided. This could include transaction fees, custody fees, platform fees, annual account maintenance fees, sales charges or commissions, or any other expenses related to the financial products recommended. A transparent breakdown of costs will help you compare possible alternate options recommended and make the right decision for your situation.

What are the Advisor’s Qualifications?

Ask about the advisor’s qualifications and credentials. Look for certifications such as Certified Financial Planner (CFP), or others that demonstrate a commitment to professionalism and expertise in the financial services industry. There are plenty of great advisors who have not obtained professional designations, so don’t let that be a deal-breaker. Additionally, check for any disciplinary history or complaints against the advisor through regulatory bodies.

What Is the Investment Philosophy?

Understanding the advisor’s investment philosophy is crucial for aligning their approach with your risk tolerance and financial goals. Inquire about their strategies, views on diversification, and how they adapt portfolios to market changes. Do they prefer a passive/strategic approach, or are they more active in how they manage investments? A well-defined investment philosophy helps ensure your accounts are managed in a manner consistent with your objectives and desires.

Can My Investments Be in Sustainable (ESG) Industries?

If ethical or sustainable investing aligns with your values, ask the advisor about their stance on Environmental, Social, and Governance (ESG) considerations. Determine whether they have experience incorporating ESG criteria into investment decisions and if they offer options that align with your ethical preferences and beliefs. Most firms have ESG investments, so ask where these can be implemented in your overall portfolio.

Can My Plan Be Flexible If It Needs to Be Changed?

Life is ever-changing, and financial plans should be adaptable to evolving circumstances. Ask the advisor how flexible the financial plan can be and what kinds of adjustments can be made in response to significant life events, market shifts, or changes in your long-term financial goals. An advisor who understands the need for flexibility can help navigate unexpected challenges more effectively and will reflect that while designing the financial plan. At HighPoint Advisors, LLC, we offer holistic financial planning that takes all aspects of a client’s finances and goals into consideration.

Now You Know What Makes a Quality Financial Advisor … What to Do Now?

Choosing a financial advisor is a significant decision that requires careful consideration. By asking these key questions, you should be able to get a more well-rounded picture of the advisor’s approach, qualifications, and commitment to your financial success. A good advisor will be sure to align his or her interests with yours, thereby creating a mutually successful fiduciary relationship for the long term. Remember that open communication and a shared understanding of your financial goals are crucial for making this happen.

At HighPoint Advisors, LLC, our team treats all clients with the respect their circumstances deserve and works hard to learn what makes them different.

Crafting a personalized roadmap is what we do, so contact us today to get started on yours!

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