What You Should Know About the Financial Industry Before You Invest

In order to become wealthy, you need to do more than simply earn money.  You need to grow your money.  In order to grow your money, you need to invest your money.

When you are ready to invest your money, you need to find the right financial professional for your specific needs.  This may leave you wondering where to start or what qualities and credentials are important for your financial advisor to have.

When you start to research your financial advisor choices, it can lead you to become even more confused because they are so many options available.  In order to make the best decision for your financial needs, you need to have the right information to navigate the financial industry  and understand what you want from your financial advisor.

Your financial advisor choice can determine financial success. Below are some things you need to know when choosing the right financial advisor.

1. Before you meet with a financial advisor, take the time to understand and determine your financial goals.  You want to make sure that your financial advisor is in line with your financial needs and does not talk you into investments you do not want or need.
2. Not all financial professionals are financial advisors.  You want to find a financial advisor that will help you manage your finances by providing advice on money issues such as investments, insurance, mortgages, college savings, estate planning, taxes and retirement, based on your specific requests.
3. The plan that your financial advisor creates is the most powerful indicator of your financial success.  You need to make sure that the financial plan your financial advisor provides is specific to your financial goals.
4. No financial professional can promise returns or guarantee they can beat the market.  If they do, walk away.  There is no such thing as zero risk.  An honest financial advisor with assess the risks and benefits of your investments.
5. The way a financial professional is compensated reveals conflicts of interest.  A fee-only fiduciary advisor is paid only by providing you a service that puts your best interests first.  A commission based financial advisor is compensated by the products they sell and may not have your best interest.
6. Insurance is an important tool for your financial life.  A financial advisor can help seek the best options for you.
7. Tax planning goes hand-in-hand with your long-term financial plan.  A financial advisor can assist arranging your affairs in ways that postpone or avoid taxes. By employing effective tax planning strategies, you can have more money to save and invest.
8. You won’t know how good your financial advisor is until the markets take a tumble. When the markets are doing well, your financial advisor will look good.  However, when the markets tumble, how effective your financial advisor’s strategy performs against an economic downturn will determine your financial advisor’s strength.  Ask how he/she handled past economic downfalls.
9. Your financial advisor should make sure that you understand that it will take time to obtaining financial independence.  You will need to start saving early and reap the benefits of compounding interest in order to have enough time for your money to grow to what you need in retirement.
10. Seek a financial professional who educates their clients. You will want a financial professional that will help educate you so that you can make more informed financial decisions.  A financial advisor should assist you to make smart money decisions to  help you succeed.
11. Find a financial professional that practices what he/she preaches.  If your financial professional doesn’t invest in what he/she recommends for you, RUN!  Ask your financial professional if he/she is investing in the investments he/she is recommending for you.
12. Choose a financial advisor that recommends that you do not invest all of your money.  Your financial advisor should have you prepare for the unexpected.  There is always a chance that something bad or unexpected can happen that will impact your finances.   A good financial professional will recommend having an emergency fund to help keep your finances on track in the face of unforeseen events.

If you are ready to invest, take the time to seek a solid financial advisor that will assist you in your financial goals.  Research your financial advisor options and if something feels off, keep looking.  This is your financial future and you should find the right fit for you and your financial goals.