What To Expect From A Financial Advisor

Don't Let Fear Get In The Way Of Seeking Help From An Expert

Do you have questions about what you should be doing with your money and how to properly plan for the future?  Have you been thinking long and hard about seeking professional help from a financial advisor, but you’re a little wary about what to expect?  This is not an uncommon feeling, and for many people the fear of the unexpected keeps them from seeking the expert advice that can help them put their financial house in order.

Fortunately, the process is not nearly as intimidating as you may think, and with a little knowledge about what to expect before going in, your mind will be put at ease. Remember, you are doing something positive for your future.  My study on the topic has even revealed that the happiest retirees are those that spend at least five hours a year on their financial planning, so don’t let fear hold you back from putting together the best plan possible to secure your future.   

Getting Started

Before you select a financial advisor, you’ll want to do your due diligence.  Referrals are always a great way to find a trusted advisor.  Be sure that you follow the guidelines provided in this article, 6 Things To Look For In A Financial Advisor.  These guidelines will help you understand the most important considerations when looking for someone to give you solid financial advice.  Be sure to seek a fee-only financial advisor that is a member of the National Association of Personal Financial Advisors (NAPFA).

These advisors work for fee-only compensation and will not be on the hunt to sell you additional products or services on which they can generate extra commissions.  Furthermore, they are bound by a strict code of ethics and judiciary duty. 

The 6-Step Process

Once you have chosen a fee-only advisor, let’s look at what you can expect from the process.

   Financial planners follow an organized plan when working with clients.  From establishing a relationship upon the first meeting to diligently monitoring the decided upon financial plan, here is what the process typically looks like:

Step 1: Establishing the Relationship

The first thing that you can expect when you see a financial planner is that a relationship will be established.  The financial planner will explain or document the services to be provided and will define his or her responsibilities along with the responsibilities of the client. The planner will also explain how he or she will be paid and by whom. The planner and client should agree on how long the relationship will last and on how decisions will be made.

Step 2: Information Gathering

Next, the financial planner will gather all of your relevant information.  This kind of information can be broken down into two different categories.  First, you will be asked for qualitative information such as your goals and objectives, including retirement goals, estate goals, and risk tolerances.  Next, you will be asked for quantitative information which includes things such as last will and testament, insurance policies, investment statements and asset/liability/income/expense data.

Step 3: Analyzing the Information

Next, the planner will go through and analyze your data.  He or she will analyze the information to gain an understanding of your financial situation and then evaluate to what extent the clients’ goals, needs and priorities can be met by the client’s resources and current course of actions.  A financial planner will also use what is called a SWOT analysis whereby he or she will determine your situation’s Strengths, Weaknesses, Opportunities and Threats. 

Step 4: Develop and Present Recommendations

Now the financial planner will develop the plan, but in full accordance with your will and assistance. You will make decisions together on how to proceed and your goals.  There will be nothing attempted without your consent and approval.  At this time you will together identify potential alternatives to the current course of action, and determine potential rewards and potential risks of the alternatives.

Steps 5:  Implementing the Plan

Now that you have decided on a plan, it’s time to implement the plan, if that is that is specified in your financial planner’s scope of the work.  You and your financial planner will agree on how the recommendations will be carried out.  

Step 6: Monitoring the Plan

You and your financial planner will agree upon who is going to monitor the plan and your progress towards your goals.  If your planner is involved in the monitoring, which must also be specified within the scope of work, he or she should report to you periodically to review progress and make any necessary adjustments.   

Remember, working with a financial planner is a partnership.  You will make decisions together and your financial planner will not make any decisions without your consent.  Understand that whether you are working with a financial planner or going it alone, the right plan will put you on a path to future financial security and happiness. 

Are you looking for some financial planning tools?  Check these out:

Retirement calculator, 401k, how do I stack up?money & happiness quiz

Disclosure:  This information is provided to you as a resource for informational purposes only.  It is being presented without consideration of the investment objectives, risk tolerance or financial circumstances of any specific investor and might not be suitable for all investors.  Past performance is not indicative of future results.  Investing involves risk including the possible loss of principal.  This information is not intended to, and should not, form a primary basis for any investment decision that you may make. Always consult your own legal, tax or investment advisor before making any investment/tax/estate/financial planning considerations or decisions. 

Wes Moss is the Chief Investment Strategist at the financial planning firms Capital Investment Advisors and Wela. He is also the host of the Money Matters radio show on WSB Radio. In 2014, Moss was named one of America’s top 1,200 financial advisors by Barron’s Magazine. He is the author of several books including his most recent, You Can Retire Sooner Than You Think  - The 5 Money Secrets of the Happiest Retirees, which has been one of Amazon’s best-selling retirement books in 2014.