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What should you be looking for when searching for a Financial Advisor? Dave recommends that you ask the following when getting to know a prospective advisor:

  1. What do you love about your job?

  2. What services do you provide clients?

  3. What is your investment philosophy?

  4. How will we communicate about my investments?

  5. How do you get paid?

  6. How will you measure and evaluate my investment performance?

  7. Tell me why your last two lost clients stopped working with you.

Although we agree that these are great questions to ask when choosing your advisor, we at Whitaker-Myers feel there is one more trait to note: the Heart of a Teacher. This so happens to be our firm’s number 1 core value. So, before you ask your potential advisors these critical questions, we encourage you to see what they teach you first. This article will explore why these questions are essential and what their potential responses could mean for you, your money, and your future.

What do you love about your job?

This question is great for building rapport. You want to find someone you trust, someone you enjoy being around, and someone who helps you understand why we are doing what we are doing for you.

People could love a multitude of things about their jobs. It could be the analysis, the client relationships, the newness that every day brings, and an infinite number of other things about this profession. Ultimately, it is up to you to figure out what personality you gravitate to.

What services do you provide to your clients?

This is a crucial question in the fact that their answer depends on whether or not they can help you accomplish your goals.

For example, if you want life insurance but they don’t have their life insurance license or someone in their firm to refer you to, check them off the prospects list.

If you want a financial plan but they only do asset management, maybe they aren’t the right fit for you.

We suggest finding an advisor offering the broadest range of services, with lots of experience in each criteria area. These criteria are:

- Tax planning

- Investments

- Retirement planning/Financial Plan

- Estate planning

- Insurance Planning

Bend their ear as to how they incorporate each aspect of those criteria in their services as a firm.

What is your investment philosophy?

My answer to this is simple. We like to invest in Dave’s 4 categories of Growth, Growth and income, Aggressive Growth, and International, broken up into appropriate 25% increments. Being able to discuss the differences in each is essential, too.

Not every advisor will have the same philosophy, and that is okay. You need to find the right philosophy for you. Risk tolerance, age, situation, retirement, etc., can all impact your personal investment philosophy. Make sure the firm you choose aligns with your goals and preferences.

How will we communicate about my investments?

Find an advisor that responds to your emails as you find appropriate. Find an advisor who answers your calls or calls you back in a manner that you find suitable.

Come into your prospect meeting with an idea of how often you’d like to review your financial situation. Is that four times a year, twice a year, or even annually? Everyone is different. Through these meetings, phone calls, emails, etc., your advisor should keep you up to date on your investments based on the level you find appropriate.

How do you get paid?

When asking this question, you should have a general idea of how advisors are compensated. They can be paid in a multitude of ways, but here are the most common:

Assets under management

  • Generally, 1-1.3% of the dollar amount you have charged annually

  • Ex. You have $10,000 to invest; you will be paying roughly $100 each year for that professional management

Insurance commissions

  • Your advisor could have the ability to sell Life, Health, Disability, and Long-Term care insurance

  • This usually pays a commission on these sales

Investment commissions

  • Some firms incentivize their employees to put you in their firm-specific funds. Those can come with load fees on mutual funds, which means there is an upfront charge to buy a mutual fund.

Fee for Plan

  • Some advisors like to forgo asset management and charge a fee for a financial plan. This often happens when clients do not want asset management but want advice on their current financial situation.

  • These fees range from a basic $500 plan to a comprehensive $5,000 + plan.

  • The comprehensive plan is suitable for larger net worth clients looking to get a snapshot of their financial situation without turning over their assets to an advisor charging for Assets under management.

  • Look for an advisor with the professional designation CFP® next to their name if you want to employ an advisor for this service. Here at Whitaker-Myers, we can offer a fee-for-plan service from the team of CFPs we work with. Contact an Advisor if you are interested in learning more about this.

*Note: Ensure you hear that the firm you are prospecting is a fiduciary, meaning they put your interest above their own.

How will you measure and evaluate my investment performance?

Search advisors who can answer this question by mentioning the 4 categories and their corresponding market indexes like the S&P 500 (growth) or Russell 2000 (Aggressive Growth).

Most advisors evaluate your investment performance based on how the markets that correlate to your investments are doing in that period.

Tell me why your last two lost clients stopped working with you.

Keep your ears perked up for anything questionable, and pay special attention to those who don’t give an example.

Honesty is what this question should bring, so a transparent advisor is one you can trust.

The power of speaking with your advisor

Everyone has different goals and timelines with their money, so speaking to a Financial Advisor or Financial Coach about your specific needs and goals is essential. Please contact one of the Financial Advisors or Coaches at Whitaker-Myers Wealth Managers; we would be happy to help!

How to Choose Your Financial Advisor

November 9, 2023

Drew Hodgson

Whitaker-Myers Wealth Managers is an SEC-registered investment adviser firm.  The information presented is for educational purposes only and intended for a broad audience.  The information does not intend to make an offer or solicitation to sell or purchase any specific securities, investments, or investment strategies. Investments involve risk and are not guaranteed.  Whitaker-Myers Wealth Managers reasonably believes that this marketing does not include any false or misleading statements or omissions of facts regarding services, investment, or client experience. Whitaker-Myers Wealth Managers has a reasonable belief that the content will not cause an untrue or misleading implication regarding the adviser’s services, investments, or client experiences. Please refer to the firm’s ADV Part 2A for material risks disclosures.

Past performance of specific investment advice should not be relied upon without knowledge of certain circumstances of market events, the nature and timing of the investments, and relevant constraints of the investment. Whitaker-Myers Wealth Managers has presented information in a fair and balanced manner. 

Whitaker-Myers Wealth Managers is not giving tax, legal or accounting advice, consult a professional tax or legal representative if needed. 

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