Updated: Jul 31
Are you afraid to speak to a financial advisor? I can relate. Growing up, the oldest of 8 children, there was hardly enough money for food, let alone investing conversations. When the time came in my career to start investing, I was scared to talk to a financial advisor. Looking back, it seems the biggest reason was a lack of confidence. I was afraid to ask "dumb questions" and really had no idea how a financial advisor worked! So if you are anxious about finding and speaking to a financial advisor, I got you. Read on for some tips on finding a "Woman-Friendly" financial advisor.
Working with a financial advisor is like working with an interior decorator. Together, you devise a plan for the room that suits your needs, then the interior designer goes out and sources all the items and brings them together for a cohesive design. Similarly, a financial advisor will create a plan for your financial goals, and once you have a plan, they will go out and invest or source the products to achieve that plan.
Financial advisors offer a variety of services ranging from budgeting to investment management and estate planning. A recent National Financial Education Council study indicates that insufficient financial knowledge costs an American $1,200 yearly.
Next, consider your relationship with your financial advisor as a long-term commitment. Retirement may be decades away, so you should feel comfortable interacting and asking questions about your money! The key is taking your time and interviewing a handful of professionals before making your final decision.
Here are some tips for finding a financial advisor.
Ask For Referrals From Friends
Asking for recommendations from other females in your life is a great way to find an excellent, trustworthy, and woman-friendly, financial advisor. It can also be helpful to ask people with whom you have similar goals or financial situations. I recommend getting a handful of names and using the below tips to see if they are a good fit.
Interview At Least 3 Advisors
When interviewing a financial advisor, you should vet at least three. Almost all reputable advisors offer free consultations. You want to ensure the person you're entrusting your financial decisions is friendly, approachable, knowledgeable, and capable of guiding you through your goals.
When interviewing and evaluating advisors, research their backgrounds, verify credentials and look at their fee structures. Be sure to ask about assets under their management, experience, and how many female clients they have.
Look For Compatibility
A financial advisor should be able to explain their role and the investment process in a friendly manner to your satisfaction. Be aware that even a 2021 BNY Study shows a "Tendency to use financial jargon and overcomplicated investment language to foster a sense that the investment customer is part of an exclusive club. This kind of marketing is actively off-putting to women: almost a third (31%) of female consumers said that overly complicated language [which can be unclear or confusing] dissuades them from investing or investing more than they currently do."
The right financial advisor can and will foster a positive and friendly relationship with you. If the individual can't give a clear explanation or makes you feel unintelligent and incompetent for asking questions, make a note and strike them from the list.
Ask About Their Mode of Payment
In the past, financial advisors' fees were a certain percentage of the assets they managed. Today, they offer a wide range of fee structures. Some advisors get paid a flat rate or percentage, while others are paid on commission from financial products and transactions they recommend to you.
There are two types of financial advisor fees forms as follows;
Fee-only and Fee-based
In this payment plan, financial advisors charge fees depending on the total assets under management. They could also charge by plan, on a retainer agreement, subscription, or hourly.
Fee-based financial advisors are fiduciaries since they are legally obligated to put your best interest before theirs. They don't get any commission on the products and assets they recommend.
While these advisors may seem 'free,' they receive payment from a portion of your purchase or investment via commissions. Sometimes, these brokers take advantage of a person's naivety by selling them products that are not necessarily needed. In these situations, it is essential to know what products the financial advisor receives commissions on.
A good financial advisor should check on you frequently, not only when beginning to work together but also after the money is invested. Similar to dating, a financial advisor may stop reaching out after the honeymoon stage.
You have a right to talk to your financial advisor on a regular basis. When interviewing a financial advisor, ask how often they will check on you and get it in writing. Also, ensure you'll speak directly to the FA you are signing up with, not through an assistant.
Don't be afraid to speak to a financial advisor. A financial advisor is a tool in your financial wellness toolbox to help build your wealth. With time and research, you can find one that is approachable, knowledgeable, and will help you meet your goals. I am confident you will find someone to put your best interests first and help you feel comfortable in your financial journey.
Thanks for reading my blog - and if you find these topics interesting, please find me on social media @HerFinIQ and check out my - "Her Money + Investing Show" episodes.
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