Twitter Facebook LinkedIn Flipboard 0 We all understand getting our financial house in order is important, but making that a reality isn’t easy. There are lots of options out there to get professional assistance, but selecting a financial advisor can feel like a daunting task. It doesn’t have to be. Debunking common myths about financial advisors Before we jump into how to select a financial advisor, let’s first talk about some of the issues people have that prevent them from ever getting out of the starting blocks. Myth #1: Financial advisors only work with rich people There’s a common misperception that financial advisors will only work with people who already have a lot of money. It’s true that many of the major brands you see on television, like Merrill Lynch or Morgan Stanley, are pushing their advisors to only accept multi-millionaires as clients, but there are a large number of independent advisors who are happy to take on clients with far less in assets or income. Myth #2: Financial advisors don’t have my best interests in mind A large chunk of this perception comes from the fact that historically most financial advisors were compensated based on the products they sold you and they were not held to a fiduciary standard. That meant they weren’t legally obligated to do what was in your best interest. As long as the product was “suitable,” they could recommend the one that made them the most money. The good news is there’s increasing emphasis being placed on holding advisor’s to a fiduciary standard and making their compensation more transparent. When interviewing potential advisors, ask them if they are a legal fiduciary. While there are perfectly good advisors who aren’t, selecting a financial advisor who is a fiduciary stacks the odds in your favor. Myth #3: Picking a referral from a friend is the best option The most common method of selecting a financial advisor is to ask a couple of friends, talk to one of the people that was recommended and either go with them or do nothing. There are several potential pitfalls here. Your friend probably isn’t an expert on what makes a good advisor. The advisor who is best for your friend’s situation may not be a great fit for you. Your network limits your possibilities. You should definitely compare several advisors before making a final decision. Selecting a financial advisor the right way Now that we’ve talked about some of the challenges, let’s discuss a better way of selecting a financial advisor. Tip #1: Know the advisor’s typical client Find an advisor who is used to working with people just like you. Ask him or her about their typical client and the types of situations they handle the most. Tip #2: Know the advisor’s background Understand what certifications and designations an advisor holds, such as being a Certified Financial Planner (CFP) or a Registered Investment Advisor (RIA). Also, find out how long they’ve been in the industry and why they got into the business to begin with. Tip #3: Feel comfortable with the advisor Since your relationship with a financial advisor is both very important and very personal, make sure you feel comfortable with him or her. You should be able to discuss any aspect of your finances and feel like you’re fully understood. Tip #4: Get proposals from multiple advisors Selecting a financial advisor is one of the most important decisions you may make in your life, so it makes sense to spend a little time on it. Getting proposals from multiple advisors accomplishes several things. Better understanding of pricing. Once you have multiple quotes, you’ll have a better sense of what you should reasonable pay, how and why. See different approaches. Every advisor will have their own approach and style. Talking to multiple advisors should help you in finding one you are comfortable with because you can compare and contrast the options. Learn from each conversation. I find each person I talk to helps educate me a little more. I think of new questions to ask and get a clearer picture of my priorities. Tip #5: Get help with the legwork Researching advisors and finding viable options can be a time-consuming process. There are lots of online directories you can Google to get a list of names, but you then have to figure out which advisors you want to talk to and then contact them one at a time. If you want some assistance, Wealthminder has created a free service to make all of this easier. Here’s how it works. You take a couple minutes to describe what help you want and what you are looking for. Your request gets sent to a nationwide network of fiduciary advisors. Advisors who are interested in your business respond with proposals. You review the proposals and select the advisors you want to do free introductory calls with. Find the one you like best and hire them. People put off dealing with their finances because it’s viewed as hard. However, the sooner you get your financial house in order, the better off you will be. We’re here to make the first step, selecting a financial advisor, easy! Twitter Tweet Facebook Share Email This article originally appeared on The Enlightened Investor and has been republished with permission.Find out how to syndicate your content with B2C Author: Kane Pepi Kane Pepi is an experienced financial and cryptocurrency writer with over 2,000+ published articles, guides, and market insights in the public domain. Expert niche subjects include asset valuation and analysis, portfolio management, and the prevention of financial crime. Kane is particularly skilled in explaining complex financial topics in a user-friendlyView full profile ›More by this author:VoIP Basics: Everything Beginners Should Know!Bitcoin Investment, Trading & Mining: The Ultimate Guide for BeginnersIs This a Better Way to Set Your 2020 Goals and Resolutions?