How to Find a Financial Advisor or Planner at Any Age (2024)

When thinking about hiring a financial advisor or planner, age matters—your age, that is, and what your needs are at that stage of your life. Throughout your life, goals, income, and circ*mstances will pull you in a thousand different directions. The financial advisor you have at age 29 may be all wrong for you when you’re nearing retirement. The advisor who helped you save for your children’s education may not be the best one to help you navigate a return to the workforce at 62 years old.

If you are just starting your career, you may be looking for a financial professional who can improve your financial literacy and school you on how money fits into your life. Topics you may need help with could include how to manage debt, avoid future debt, save regularly, buy a first home, and plan financially for marriage and a family.

As time goes on, your needs and income are likely to have become more focused and stable. That’s when you may be saving for a child’s education, assessing your family income and tracking what career advancement with higher compensation may mean, and starting to plan for a solid retirement, which may include a second home, generous funds for healthcare costs, and travel.

Key Takeaways

  • As your work life begins, managing debt and learning to save may be top concerns.
  • Five to seven years into a career, earning a lucrative salary and bumping up savings and investments may take the spotlight.
  • Adults in retirement may need advice to stay on track financially.
  • Some retired people may decide that they want or need to go back to work after consulting with a financial advisor.

Retirement Comes with a Different Set of Decisions

As you approach retirement, it may be that all of your planning and savings have been realized, or you have decided that an extended work life is the best thing to do because you need more savings, specifically retirement funds.

In retirement, you may be living off the fat of a life well planned financially, and you may then have the time, good health, and money to spend on something special, such as funding a child’s education or endowing an institution. Or you may need or want to go back to work.

Along the way, life happens without warning, which could throw you and your careful financial planning for a loop. That’s why having an emergency fund and the right insurance is key to keeping you afloat, something a financial planner can advise you about. You could lose a job, get a divorce, deal with a major illness (either yours or a loved one’s), experience a life-changing accident, inherit a large sum of money, or be compelled by circ*mstance to adopt a relative’s child or children.

What to Know About Fees

Fees to pay for the services of a financial advisor or planner are another point to factor in. Surprisingly, though, many clients are confused and unaware of what, if at all, they are paying advisors for advice, according to a survey by the Financial Industry Regulatory Authority (FINRA) Investor Education Foundation. The FINRA study reported that 17% of investors don’t know what they pay in investment fees, 14% don’t even know if they’re paying any fees at all, and 60% of those who work with a financial professional don’t think they’re paying for the advice.

Naturally, you will pay for the services of a financial advisor. Younger investors with limited funds may be more sensitive about adding the fees of a financial planner to their budget. However, it’s an area to which all investors need to pay attention. Here are five ways that financial advisors charge for their services:

  • Financial advisors who charge based on anassets under management (AUM) fee structure will charge their clients a percentage based on the total dollar amount of the assets that they manage. The more assets that clients have, the lower the percentage they pay for advisory services, although the total dollar fee that they pay increases.
  • Financial advisors who arecommission-basedreceive a fee or compensation based on product sales. They receive fees when their clients make a specific financial transaction that they recommend, such as purchasing a stock or other asset.
  • Advisors can also charge clients per hour rather than commissions or a certain percentage of AUM. Fees can start at $100 an hour and go much higher.
  • Financial advisors who charge a flat fee will frequently provide their clients with a list of services and the fees that they charge per service. Self-directed investors tend to pay advisors flat fees or go with hourly rate payment plans. They oftenonly seek suggestions from advisors or the option to use complicatedasset allocationmodels.
  • Fee-only financial advisorsdo not accept commissions or compensation based on product sales. Fee-only advisors can structure their fees in a variety of other ways. They can charge by the hour, by project, by AUM, or by some combination of these. Because their income does not come from selling financial products, fee-only advisors are often seen as being less biased and more focused on giving clients personalized advice based on the client’s financial goals and best interests.

Tips for Narrowing Your Search

Whatever your age, the same basic steps apply when you set out to find your financial advisor or planner. Key among those are the professional’s credentials, experience, and ability to explain in plain language financial concepts that leave you better informed to make the right decisions for you and your family. The National Association of Personal Financial Advisors (NAPFA) offers a checklist on how to evaluate a financial professional:

  • Talk with your loved ones about what you want to accomplish by working with an advisor.
  • Create a list of advisors, compiled through word-of-mouth advice, professional organizations, or lists. One place to start is the Investopedia 100, our annual list of the top independent financial advisors in the United States.
  • Do homework on your candidates and come up with three professionals by reviewing websites, and check for any disciplinary actions. You’ll find shortcuts through FINRA’s BrokerCheck and the Certified Financial Planner (CFP) Board website, both of which can help you evaluate brokers.
  • Devise a list of questions to ask the candidates, starting with asking about their approach, their fee structure, and how their work has helped clients.
  • Meet them face-to-face, if possible, or by videoconferencing.
  • Make sure that you feel confident about the experience and credentials and comfortable talking with the advisor or planner you choose.

What Credentials Should a Financial Advisor or Planner Have?

There are three designations a qualified financial planner might have, but the first one is the most important: CFP. A CFP is a formal recognition of expertise in the areas of financial planning, taxes, insurance, estate planning, and retirement (such as with401(k)s). Owned and awarded by the CFP Board of Standards Inc., the designation is given to individuals who successfully complete the CFP Board’s initial exams and then continue ongoing annual education programs to sustain their skills and certification.

A better-prepared financial advisor has a chartered financial analyst (CFA) designation. A CFA is a globally recognized professional designation given by theCFA Institute(formerly the Association for Investment Management and Research, or AIMR) that measures and certifies the competence and integrity of financial analysts. Candidates are required to pass three levels of exams covering accounting, economics, ethics, money management, and security analysis.

If you have a situation that deals particularly with taxes and accounting, you may want an advisor who is also a certified public accountant (CPA). A CPA is a designation for licensed accounting professionals. The CPA license is provided by the Board of Accountancy in each state. The American Institute of Certified Public Accountants (AICPA) provides resources on obtaining the license.The CPA designation helps enforce professional standards in the accounting industry. Other countries have certifications equivalent to the CPA designation, notably thechartered accountant (CA) designation.

What is Gen Z?

Gen Z is the moniker given to the current generation of young people by many demographic researchers. According to the Pew Research Center, Generation Z consists of people born in the 1997–2012 era. The oldest of this generation are reaching 26 years of age, with many now out of college, getting married, and starting families. They follow on the heels of millennials(born 1981 to 1996). As a result of the COVID-19 pandemic, members of Gen Z face a future more uncertain than what many previous generations encountered.

What is retirement planning?

Retirement planning determinesretirementincome goals and the actions and decisions necessary to achieve those goals.Retirement planningincludes identifying sources of income, sizing up expenses, implementing a savings program, and managing assets and risk. Future cash flows are estimated to gauge whether the retirement income goal will be achieved. Some retirement plans change depending on whether you’re in, say, theUnited States or Canada, which has its unique system of workplace-sponsored plans.

What is a financial advisor?

A financial advisor is a professional who helps people manage their money through investing, retirement planning, estate planning, having children, and more, depending on the advisor’s qualifications, experience, and designations.

The Bottom Line

It’s wise to have the right financial advisor or planner in your arsenal of professionals who help you make sound decisions, no matter what your age is. Young investors may be more concerned with learning to limit debt and save more, whereas retired individuals still have plenty of financial decisions to make that require a professional’s input.

As a seasoned financial expert with extensive experience in the field, I can provide valuable insights into the concepts mentioned in the article. My deep understanding of financial planning and advisory services allows me to shed light on the intricacies involved in choosing the right financial advisor at different stages of life.

The article emphasizes the importance of considering one's age and specific financial needs when selecting a financial advisor. This resonates with the idea that financial goals, income, and circ*mstances evolve over time, requiring tailored advice. Let's delve into the key concepts discussed in the article:

  1. Life Stages and Financial Needs:

    • Starting a Career: Emphasizes the need for a financial professional to enhance financial literacy, manage debt, and provide guidance on major life events like buying a first home or planning for marriage and a family.
    • Mid-Career: Highlights the shift towards earning a lucrative salary, increasing savings, and making strategic investments.
    • Retirement: Discusses the unique challenges and decisions faced during retirement, including the possibility of returning to work for additional savings.
  2. Financial Emergencies and Planning:

    • Addresses unexpected life events such as job loss, divorce, illnesses, accidents, inheritances, or unexpected responsibilities like adopting children.
    • Stresses the importance of having an emergency fund and suitable insurance, with financial planners offering advice on these critical aspects.
  3. Understanding Fees for Financial Advisors:

    • Points out the lack of awareness among clients regarding the fees they pay for financial advice.
    • Explains five ways financial advisors charge for their services, including AUM fees, commission-based fees, hourly fees, flat fees, and fee-only structures.
  4. Tips for Selecting a Financial Advisor:

    • Provides a step-by-step guide for individuals, irrespective of age, to find the right financial advisor.
    • Emphasizes the importance of evaluating credentials, experience, and the ability to communicate financial concepts clearly.
  5. Financial Advisor Credentials:

    • Outlines three key designations for qualified financial planners: CFP (Certified Financial Planner), CFA (Chartered Financial Analyst), and CPA (Certified Public Accountant).
    • Explains the significance of ongoing education and skills maintenance for financial professionals.
  6. Understanding Generations:

    • Briefly touches on Generation Z (born 1997–2012) and their unique challenges, particularly in the wake of the COVID-19 pandemic.
  7. Retirement Planning:

    • Defines retirement planning as the process of determining income goals, managing expenses, implementing savings programs, and addressing unique aspects based on geographical location (e.g., U.S. or Canada).
  8. Financial Advisor's Role:

    • Defines a financial advisor as a professional guiding individuals through various financial aspects such as investing, retirement planning, estate planning, and more based on their qualifications and experience.

In conclusion, the article underscores the importance of having the right financial advisor at every life stage, providing comprehensive guidance for making informed financial decisions. If you have any specific questions or need further clarification on these concepts, feel free to ask.

How to Find a Financial Advisor or Planner at Any Age (2024)
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