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Everywhere you go, you’ll get different financial advice, and what works for one person may not work for another. You must first determine what works best for you and then proceed from there. The current recession has taught us one thing: you need a financial plan, even if it’s a basic one that helps you save more and spend less, especially on credit.
But how can you tell if financial advice is sound?
Despite enough financial advice available, the final decision is yours. You are the best judge of the lifestyle you live, the lifestyle you want to live, and your future goals. Any tell you to receive is that: advice and an option for you to consider; but, you must make the final decision for the sake of your financial future.
When you discover a financial advisor you can trust and who provides you with sound advice that fits your lifestyle, you may build a strong bond with them and ask them to assist you with your financial decisions. When selecting a financial counselor, keep the following in mind.
1. When visiting a financial advisor, find out if they are affiliated with the company they work for. A ‘tied’ financial agent works for a firm and is obligated to sell and promote that company’s products and services. They will not offer you better money opportunities elsewhere because they are only selling you their product. While a professional financial advisor can help you to some extent by explaining which of their products would be ideal for you, their advice is skewed toward their own products. They will not tell you if there is better counsel available elsewhere.
2. The commissions on the products that financial advisors sell make up a large part of their revenue. They care about making a sale because they work on commission; if they don’t make a sale, they don’t get paid. To increase their commission, some advisors will try to sell you needless products or services.
When picking a financial advisor, make sure you understand the commissions they receive and the costs they will you. Don’t get caught up in the trap of buying all they have to offer because it may not always be in your best interests.
3. Will your financial advisor take on the role of fiduciary? This is a critical component in determining whether your financial advisor is acting in your best interests. An advisor who accepts fiduciary duty is bound to act in the best interests of the client. If a financial advisor refuses to accept fiduciary duty, they are only bound to act in your best interest if it does not harm you.
4. Is your financial advisor or planner able to assist you with various parts of your financial strategy? Some advisors are qualified in a few areas and can only provide guidance in those areas; in that case, you’ll need to seek help from another advisor. A professional financial advisor should be able to assist you with all aspects of financial planning, such as insurance, investments, and debt management.
These four tips can help you find a reliable financial advisor who can help you stay on track with your finances and ensure a safe financial future. Financial matters can be puzzling and intimidating at times, and while visiting a financial counselor is costly, it can save you a lot of money in the long run.
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