Have you ever wondered if you need a financial advisor or retirement expert?
Most of us want expert advice, but aren’t sure if we’re a good candidate to work with a professional.
You’ve probably heard that many financial advisors only work with wealthy people who can pay big fees and commissions. So maybe you’re worried that you don’t earn enough or have enough assets to “qualify” for their help.
The good news is that more and more financial advisors are offering services to regular people who also want a leg up. But how do you find them or know what fees are fair?
Just like with many of life’s challenges, technology is coming to the rescue!
I contacted Rich Ellinger, who is an innovator in the financial services industry, to learn more about his new company, Wealthminder.
How to Find the Best Financial Advisor or Expert
This Q&A with Rich will help you understand how to find the right financial advisor, no matter how much (or little) you earn.
You’ll know where to go, what questions to ask, and how to get the best price for the services you need to achieve your financial goals.
Resource: Financial Advisor Assessment Tool (PDF) free download
Q: Rich, what inspired you to start Wealthminder?
A: Every day you see articles about how most people aren’t on track for achieving their long-term financial goals, and it’s getting worse. The reality is, we’re living longer, education and healthcare costs are rising far faster than inflation, and traditional safety nets (like pensions), have largely disappeared.
We have a larger financial burden to bear now. And the first step to correcting this problem is connecting people with advisors who can and will help them.
Q: Why is connecting people with advisors so challenging?
A: The vast majority of American households (almost 100 million) don’t have sufficient assets to make a traditional relationship with a financial advisor work. And discount brokerages aren’t in the game of providing real financial planning and guidance. So you end up with a situation where people have no place to turn for help.
Wealthminder was started to bridge that gap. Through the use of technology, we can reduce the costs of helping people. We can make getting financial help affordable for consumers, while still allowing an advisor to run a profitable business.
Q: How do most people find financial advisors today?
A: Most people find a financial advisor through a very ad-hoc process. They ask their friends for referrals and then talk to a few of them. They either decide to do nothing or hire the advisor that they liked best.
Q: What is Wealthminder doing differently?
A: Here are 5 things we’re doing differently in the industry:
- We make it easy to find financial help. Instead of researching advisors and contacting them one at a time, you simply describe what you need help with today. That might bet getting answers to specific questions or a comprehensive financial plan and investment guidance.
We send your request to our network of qualified advisors and they respond with proposals. You review them, can ask follow up questions or schedule a call, and then hire the advisor you want.
- We guarantee satisfaction. If a professional doesn’t meet your expectations we simply give you your money back.
- We offer simple pricing. All proposals you receive will be priced as a flat fee with no hidden costs.
- We make it easy to compare prices. Since you’ll receive multiple proposals, it’s easy to quickly understand what the market price is for your request.
- We only work with fiduciary advisors.
Q: How does working with a fiduciary advisor help consumers?
A: Being a fiduciary means that an advisor has to put your best interests first. What most people don’t realize is that the vast majority of advisors are only held to a “suitability standard.” Suitability means that they have to make reasonable recommendations, but not necessarily the recommendation that is best for you (as opposed to them).
The bottom line is that advisors who aren’t held to a fiduciary standard can recommend products that are in their best interests, as long as they as deem them suitable for you.
Q: What are the main challenges we face when choosing a financial advisor?
A: It’s very time consuming and there’s little to no pricing transparency. There are few tools and resources to help you compare your options, which makes it difficult to know which advisor is best for you.
Q: What types of financial advisors are in your network?
A: To be part of the Wealthminder network, advisors have to meet the following 3 criteria:
- Be held to a fiduciary standard.
- Commit to providing fee-only work.
- Be registered with the appropriate regulatory bodies and have a clean disciplinary record.
Free Resource: Financial Advisor Assessment Tool (PDF)
Q: How do you qualify Wealthminder financial advisors?
A: We fully qualify our advisors by reviewing their online filings with the appropriate regulatory bodies. Then we interview him or her to confirm that they meet our qualifications and are willing to adhere to our standards.
We plan to support an online rating system to give customers a voice and increase transparency. Advisors who don’t receive great reviews will be removed from the network.
Q: What are the top qualities you should look for in a financial advisor?
A: When you’re choosing a financial advisor, look for someone who is used to working with people similar to you. So it’s important to understand who his or her typical client is, and the types of services they offer the most.
Also review an advisor’s background and credentials to help validate their expertise. For instance, being a Certified Financial Planner or CFP is definitely a plus, in my opinion.
And since getting financial advice is still a human-to-human relationship, pick someone you like and are really comfortable with.
Q: What’s the first question you should ask a potential advisor?
A: Ask him or her to explain the types of people they typically work with and the types of problems they help solve. Then ask a potential advisor about their background and why they became an advisor to begin with.
Thanks to Rich, the founder and CEO of Wealthminder, for your great advice!
Visit Wealthminder.com to learn more about connecting with the best financial advisor for your situation, and start making the most of your money.