There are as many different types of financial advice as there are financial advisers, making the process of selecting the best one to assist you in achieving your financial objectives challenging.
Follow the money is one maxim I believe is wise to remember at all times. Consider how the individual giving you advice is paid, whether you’re looking at a brokerage business or an internet personality.
Do they provide direct sales of your books, seminars, or podcasts? Do they receive commissions from the investments you buy? Or is their fee predetermined and/or dependent on a share of your assets, regardless of the purchase they suggest you make?
A salesman is someone who earns a living by promoting products. Although there is nothing improper with being a salesperson, a person who stands to gain financially from persuading you to purchase a certain product is unlikely to be the most objective financial counselor available.
Even if it’s merely a book or online course that teaches you how to become wealthy, consider the following: Is the person selling you financial advice wealthy because they have a successful investment plan that you can’t discover anyplace else? Or are they wealthy as a result of their success in persuading others to follow their advice?
Other than a remarkable bit of luck, there is no plan to get wealthy over night. Long-term wealth building is simply that—a long-term plan. You may maximize your financial resources and accomplish your personal goals by engaging in sound financial planning.
Since there is no one-size-fits-all strategy that is effective for everyone, it is crucial to pinpoint your unique requirements before meeting with a counselor. Most of us only have a certain amount of money, so we occasionally have to make difficult decisions about how to divide our resources.
There are many people who advertise themselves as financial experts. The rags-to-riches tales of some of them are charming. Some claim to be financial authorities. The majority of them offer the same thing: if you take their advise (which you often have to pay for), you’ll become wealthy as well.
Some financial professionals have sage advice to provide. But pay close attention to how they actually generate revenue. Did they become wealthy through some deft investment plan or by the sale of their purportedly deft investment approach to others?
My observation is that wealthy individuals sell high-risk assets, not purchase them. Full-service brokerage businesses encounter a related issue. No matter how skilled your broker is, selling is always their primary function.
Employees at brokerage businesses aren’t rewarded for expanding their knowledge base or offering wise counsel. They compensate brokers for sales, so ultimately, your broker’s primary concern is the company, not you.
Working with a fee-only independent financial advisor has several benefits because we don’t accept commissions. This indicates that an unbiased financial counselor is focusing on your requirements rather than trying to sell you anything.
My responsibility is to objectively evaluate your requirements, your resources, and your goals and then work with you to create a strategy that is specific to your needs. Although it’s less glamorous than claims that you’ll become wealthy over night, this tactic does in fact work.
My opinion is that there are other methods to learn than going through a self-described financial expert if you’re interested in managing your money independently but lack a lot of expertise or experience. A excellent place to start is with a company like Fidelity or TD Ameritrade. You might also begin working with a financial advisor and let him or her know up front that one of your objectives is to develop your own financial management skills.
Finding the correct financial adviser for you is important if you do decide to do so. Financial planners are as unique as their customers, therefore it’s important that you get along well with your adviser, that they comprehend your circumstance, and that they are knowledgeable in the fields in which you want that knowledge.
