6 Steps to Finding the Best Financial Advisor

July 17, 2024

Hiring a financial advisor is one of the most important decisions you’ll ever make – especially as you approach or begin retirement.

The right advisor can coordinate all aspects of your retirement plan – investing, legal, tax, and more – giving you the peace of mind to enjoy your golden years. Of course, the wrong choice can be disastrous.

Do you want financial peace of mind? Contact Prime Wealth Advisors and see how we can help.

With that in mind, here are six steps to ensure you find the best financial advisor:

Step 1: Look for a Team of Specialists

If one person handles your entire retirement plan, you’re almost certain to get a “jack of all trades, master of none.”

You need a team of specialists that can combine to provide expertise in these five fields:

Retirement Income Planning

This service considers all of the variables that go into your retirement income. How much do you need? What are your Social Security, pensions, investments, and tax liability projected to leave you with? A good advisor will consider a number of different scenarios. For example, taking Social Security at 66 vs. 70 or projecting your investments at a 4% annualized return vs. a 6% annualized return. You want someone that errs on the side of caution with projections and considers anything that can realistically happen.

Investment Management

A good investment manager will determine your required rate of return and craft an ideal allocation of your assets. Stocks and bonds are the two most prominent asset classes; the former is riskier, but often achieves higher returns than the latter. Look for someone that believes in diversification and doesn’t go all-in on the flavor of the day.

Risk Management

Risk takes many forms in retirement planning. There is a risk of low or negative investment returns, which can be mitigated by diversification and higher allocations in safer asset classes, such as bonds. There is also the risk that you pass earlier than expected; life insurance can ensure that your loved ones are taken care of in that event.

Tax Advice and Services

Taxes can take a big bite out of your retirement income if you don’t have a savvy tax professional working on your behalf. An expert will structure your investments in a way that minimizes your tax liability. Additionally, you can have an expert handling the filing and payment of your taxes, allowing you to avoid that headache.

Estate Planning

There is a lot that goes into estate planning. You’ll need to create a will (if you don’t already have one), and potentially trusts, power of attorney, joint tenancy, and more. A good estate planner will set you up in a way that protects your assets and minimizes your tax liability in the various potential end-of-life scenarios.

At Prime Wealth Advisors we incorporate all 5 of these areas in the services we provide to our clients. The advantage is we are able to work efficiently to save you money and produce superior results.

Step 2: Look for the Right Credentials

In Step 1, we went over the specialties that are required in your team of advisors. But how can you know whether they are proficient in those fields?

Fortunately, the financial industry has a lot of standardized credentials. There are many different designations, such as CERTIFIED FINANCIAL PLANNER™ or Chartered Financial Consultant® that a financial advisor may have.

Financial advisors attain these credentials by passing a series of exams that test their proficiency. The institutes for the best programs have stringent ethical standards and require ongoing education.

Step 3: Look for Transparency in their Fee Structure

Financial advisors can be compensated by fees (which are paid by their clients) or by commissions (which are paid by a 3rd party: mutual fund company, life insurance company). Some financial advisory firms contract out with other professionals to assist with all of their client’s financial needs.

However a financial advisor is compensated, it is important that they provide full transparency and a clear written proposal of the services you can expect, and what you will be paying for them.

At Prime Wealth Advisors we practice full transparency for our services. You will know upfront what fees you will be paying so there are no surprises.

Step 4: Search for the Right Advisor

Now that you know what to look for on paper, it’s time to create a shortlist of potential choices.

A recommendation from a trusted friend or relative is ideal, particularly if they meet the above qualifications, but if that’s not possible, you can begin your search online.

One option is to google financial advisors in your area. Such as: “I need an advisor in Sun City Arizona” or “Find the best financial advisor in Scottsdale Arizona”. A lot of advisors have a solid online presence and you can further qualify candidates by reading reviews.

When evaluating a potential advisor here are a few things to look for:

  1. Do they have a website? Does it provide you with enough information?
  2. Look at compliance records
  3. How long have they been a financial advisor?
  4. How many years of relevant experience do they have

Step 5: Set up Meetings

By now, you should have a small handful of candidates to consider. The next step is to set up meetings to see who is the best fit.

There is a good way for this to go… And a bad way for this to go.

The good way:

You walk into a warm greeting and the advisor takes an interest in your financial situation and life goals, slowly taking everything into account. They ask pointed questions to determine your total financial picture, income needs, risk tolerance, and long-term outlook.

The bad way:

Before you have a chance to settle in, the advisor starts droning on about how much money they’ve made for other clients and how you could be next in line. They start making unrealistic promises such as double-digit annualized returns with no risk. If this happens, don’t walk – run!

Step 6: Come to a Decision

After taking the meetings, you’ve likely whittled it down to two or three finalists. Let’s say all of these finalists are qualified and seem trustworthy. How do you pick one?

You need to find the right one for you.

A lot of this comes down to gut feeling and comfort. Compatibility is sometimes overlooked, but important.

For example, if (when) the market takes a tumble, you might feel the need to give your financial advisor a call and see if you’re positioned to weather the storm. You want to get off that call feeling confident and reassured. The numbers might look great, but you don’t want an advisor that leaves you feeling uncertain. A good financial advisor can play psychologist during market turbulence, staying level-headed, and giving you the facts.

Obviously, you can’t project how every situation is going to play out, but you can choose an advisor that seems cool, calm, and collected during your meeting(s).

Furthermore, you should choose an advisor that you click with. After all, you could be working with them for years to come.

Prime Wealth is passionate about helping you protect your wealth and structure a secure income stream in retirement. Contact us today for a complimentary consultation.

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