How to Choose a Financial Advisor

How to Choose a Financial Advisor

Financial advisors assist customers in managing their money and achieving their financial objectives. They can offer a variety of financial planning services, such as investment management, budgeting advice, and estate preparation. 

Choosing the correct financial advisor sydney for your situation is critical because it prevents you from paying for services you don’t require or dealing with an advisor who isn’t a suitable fit for your financial goals. This post guides you in choosing the best financial counselor for you. Let’s consider the following key steps

  1. Determine which financial services you require

Determine why you are seeking financial assistance by asking the following questions:

  • Do you need assistance with investing?
  • Do you want to make a financial plan?
  • Do you require budgeting assistance?
  • Do you need to update your estate plan or establish a trust?
  • Do you require tax assistance?
How to Choose a Financial Advisor

Your responses to these questions will assist in establishing the type of financial advisor you require. If you merely need help investing, a Robo-advisor can do it for you for a small fee. If your financial situation is complicated, you may wish to consult with an online or traditional financial advisor. Luckily, at Omura, we provide financial services covering all the areas listed above, and we’ll pair you with a financial advisor that suits your needs. 

  1. Get to know your financial advisor

Investment advisers, brokers, certified financial planners and coaches, and portfolio managers are all titles for financial advisors. Some are even called money therapists. So, who does what, and who can you rely on? Because some of the most frequent names used by advisors aren’t related to any specific credentials, don’t assume that someone who uses an official-sounding title has any special training or credentials. Anyone who provides investment advice must be registered as an investment advisor with either the Securities and Exchange Commission or the state, depending on the number of assets under management.

Some financial advisors owe their clients a fiduciary obligation, which means they must operate in their clients’ best interests rather than their own. Always engage with a professional, registered fiduciary – preferably one who is fee-only, which means you pay the advisor directly rather than through commissions for selling specific investment or insurance products. As part of their accreditation, certified financial planners have a fiduciary duty to their customers.

Let’s quickly enumerate the attributes of fee-only and fee-based financial advisors to help you determine which would make the best financial advisor for you;

Fee-Only Financial Advisor

  • Clients pay them directly for their services; they cannot receive other forms of compensation, such as payments from fund providers.
  • Act as a fiduciary, which means they are expected to prioritize their clients’ interests.

Fee-Based Financial Advisor

  • Paid by clients, but also from other sources, such as commissions from financial goods purchased by clients
  • Brokers and dealers (or licensed agents) are only obligated to market “appropriate” items to their clients.

Whatever title, classification, certification, or license an advisor claims to hold, it is your responsibility to investigate the advisor’s credentials and experience before agreeing to deal with them. Always examine their background. 

  1. Research your financial advisor’s possibilities

Financial advisors aren’t merely available in your local bank or advice office. There are numerous ways to obtain financial guidance. The best option for you will most likely be determined by your particular tastes, the services you require, and your budget.

An online financial planning service that provides virtual access to human financial advisors is the next step up from a Robo-advisor. A basic online service may provide the same automatic investment management as a Robo-advisor, as well as the option to consult with a team of financial advisors when you have questions.

Online financial planning services are often less expensive than traditional financial advisors but more expensive than Robo-advisors. Some services have relatively significant investment needs of $25,000 or more, while others do not.

On the other hand, traditional financial advisors can meet with you in person and assist you with all of your financial planning requirements.

This is frequently the most expensive option. Many traditional advisors charge between 1% and 2% of your assets under management. Some advisors also have a high minimum balance requirement, such as $250,000 in assets.

However, when you need specialist services, your situation is complex, and you want to meet your financial advisor in person and create a long-term relationship with them, this is the option for you.

How to Choose a Financial Advisor
  1. Consider how much you can pay an advisor

Financial advisors have a bad image for being expensive, but there is a solution for every budget. Before you commit to services, it’s critical to understand how much a financial advisor cost. In general, there are three cost levels that you are likely to encounter:

Robo-advisors frequently charge an annual fee based on a percentage of your account balance. Robo-advisor fees typically begin at 0.25% of the assets managed on your behalf, with many top firms charging 0.50% or less.

Online financial planning firms and advisors charge a flat subscription fee, a portion of your assets, or both. Personal Capital, for example, charges 0.49% to 0.89% of assets under management per year. 

Traditional financial advisors frequently charge a percentage of the amount managed, with a median fee of 1%, though this might vary for small and big accounts. Others may request a retainer, a set price, or an hourly cost.

The amount you should spend on a financial advisor is determined by your budget, assets, and the quality of financial advice you require. If you have a small portfolio, an in-person advisor may seem like overkill, but not at Omura. Here, we offer top-tier services even to the average person and at an affordable fee. Why not check out the range of services we offer and see the best fit for you?

  1. Check the background of the financial advisor

If you choose to deal with a typical financial advisor, you must thoroughly vet them. Verify any credentials they claim to have and look into any disciplinary issues, such as fraud. If you deal with an online financial advisor, it’s not a terrible idea to do this as well, although most will perform the vetting for you.

Vetting the background of a financial advisor may have influenced you to opt only for a financial advisor near you. If you need an Australian financial advisor, Omura has got you covered. Just contact us now, and we’ll pair you with the best financial advisor.