Life is full of choices. From selecting an education, to pursuing a career, buying a home, and planning for retirement, the choices you make now can have a huge impact on your well-being and financial security. One of the most important decisions is choosing a financial advisor. A top-notch financial planner will become your champion, helping you manage your wealth. Pick the wrong planner, however, and he or she may rip you off while contributing little of value.
That’s why we put together this quick guide for choosing a financial advisor that won’t rip you off. Consider the below points while selecting a financial advisor and you’ll reduce the risks of getting taken advantage of.
While the PWG Financial team is diverse and our experienced varied, there’s one thing we all have in common: We put our customers and their needs first. Contact us today to learn more.
Ask About Fiduciary Duty
It’s wise to work with an Investment Advisory Representative (IAR) as these advisors have a fiduciary duty to their clients. This means they’re legally required to put their client’s interests first and to disclose any potential conflicts of interest. You may think all financial planners are required to disclose conflicts of interest and put their client’s interests first. However, that’s simply not true.
At PWG Financial, our collective staff has worked for a variety of companies over the years. And we’ve found that many firms, including some of the biggest names in the industry, actually care more about selling products and earning a commission than helping clients. One of the things that brought the team at PWG Financial together was our collective desire to put the clients first, and to cut out the sales pressures and focus on managing our clients’ wealth.
Find Out Where the Planner or Advisor Makes Their Money
When you’re talking with planners, ask them directly where and how they make their money and to provide a breakdown. If they’re skittish or seem to withhold information (i.e. a potential conflict of interest) take note. Ask about conflicts of interest as well, and if they earn a commission through selling any products.
There could be legitimate reasons for a financial advisor to earn a commission by recommending a product. However, he or she should be forthright about the commission and the product they’re selling should offer an excellent value. If you can quickly find a better product, service, or value that should raise a red flag.
How Hard Do They Strive to Know You?
We founded PWG Financial specifically because we were sick of working for financial planning firms that were little more than glorified sales companies. Sure, the offices were nice, and the pay was great, but it’s hard to add value to clients when the C-Suite wants to see sales and nothing but sales, performance otherwise be damned.
You can often identify a sales focused company simply by observing their methods. If your financial planner is under a lot of pressure to sell certain products or to rack up sign-ups, you’ll frequently notice it when talking with them. Rather than learning about your financial situation and goals, they’ll constantly try to push products or specific services. Quite simply, you don’t matter, the products and services do.
A financial planner who truly cares about you won’t start by pushing products or services. Instead, he or she will take the time to learn about your situation and aspirations. Then, with this knowledge in hand, he or she will help you build a customized financial plan based on your needs.
At PWG Financial, clients come first. There’s no one-size fits all approach to building a financial plan, and what works for one client may not work for another. That’s why we work hard to get to know our clients. Want to see what excellent financial planning services look like? Get in touch!