If you’re searching for a financial advisor, you may be overwhelmed by your options. It can feel like there are countless specialties, payment structures, and relationships that will each bring unique benefits (and drawbacks) to your financial needs. A fee-only financial advisor is one of your options, and it’s a popular choice for many business owners and individuals seeking advice about their finances. Here’s what that means for you and what to consider when evaluating specific advisors.
What is a fee-only advisor?
A fee-only advisor is a financial advisor who operates using a fee-only payment structure. Note that this distinction has nothing to do with the person’s qualifications, so you’ll want to look for someone who is registered and certified according to national financial advisement standards. Then, you’ll evaluate services and fees.
Unlike other financial advisors who are incentivised to sell products, fee-only financial advisors are paid fees for the advice given. Fees may be charged by the hour, on an annual retainer, or based on percent of assets or income.Because these advisors provide advice for a fee, they have no vested interest in you choosing one particular investment product over another. Of course, they care about getting you the best possible result in alignment with your goals. Still, their payment isn’t tied to one outcome or another. This allows them to be unbiased in their recommendations, unlike advisors incentivized to promote specific products.
What are the benefits of working with a fee-only advisor?
As you can see above, the key benefit of working with a fee-only advisor is that you’ll receive an unbiased professional opinion in each matter you discuss. You’ll never have to wonder if you’re being led astray or if your money is benefiting your advisor rather than yourself. Choosing a fee-only advisor should feel more like collaborating with a trusted partner rather than evaluating a sales pitch each time you have a choice to make about your financial life.
Additionally, you’ll always know what you owe for their services with a fee-only financial advisor. This transparency allows you to understand where your money is going clearly and to budget for the services in advance.
How to get started with a fee-only advisor
When looking for a fee-only financial advisor, make sure to double-check that the person you’re hiring has a fiduciary responsibility to their clientele. Fiduciary responsibility means that the advisor is legally required to act in the client’s best interests above their own, which is critical to the legitimacy of the advice they’re giving you. Don’t forget to check that the person is registered and certified, as well.
Lastly, make sure you feel like the person you hire is a good fit for your needs. There are many financial advisors to choose from, and you may not find the perfect option on the first try. If you’re not quite sure if you’re making the right choice, consider consulting with a few advisors before making a choice. It’s crucial that you feel confident in the person you’re selecting to help protect your legacy.
If you’re looking for comprehensive financial planning services, Blue Tree Financial is here to help! We are a fee-only firm specializing in family business succession, inheritance management, and assistance for women-owned businesses. Learn more about our services here and schedule a consultation with us today.
