When Baby Makes Three
How to choose a financial advisor who is right for you and your family
When selecting a financial advisor, consider the following strategies:
Collect referrals from trusted friends, family, colleagues, and neighbors. Look to friends who are in a similar financial or personal situation as you.
Ask your accountant, attorney, or other trusted financial professionals for referrals. Even if you have collected a few names, it's best to verify their reputation within the professional community.
Arrange interviews with several candidates. It's important to learn more about their educational and professional designations, work history, investment experience, and products and services offered. Also, be sure to check their qualifications and ensure that he/she and his/her firm are properly registered with the National Association of Securities Dealers (NASD), the U.S. Securities and Exchange Commission (SEC), or a state insurance or securities regulator.
Look for a financial advisor who is well versed in the variety of financial planning needs you'll require. Some financial advisors specialize in working with high-net-worth individuals, while others work with families simply trying to get their finances on track. Some financial advisors even specialize in working with families with a special-needs child . Whatever the case, talk about your needs and concerns in your initial interview and make sure you choose someone whose investment philosophy and money management style is aligned with yours. Also note that some financial advisors work in teams, so they can offer an expanded skill set to better meet your various needs.
Ask your top candidates for references and follow up with them. A true professional will be happy to provide you with a long list of satisfied clients.
You've identified an advisor now what?
Initially, your financial advisor will help you determine your financial goals and dreams. This process will challenge you to think about why you hired a financial advisor in the first place. In your initial meeting with your advisor, he/she will help you to determine your risk tolerance, how your age will affect your overall strategy, and other factors that are important when tailoring a financial plan.
In addition, your financial advisor will compel you to answer questions such as:
Do you want to retire early and travel the world?
Do you want to send your children to a private college?
Is philanthropy an important part of your financial outlook?
Are you hoping to finance the home of your dreams?
Do you want to leave an inheritance to your children?
These questions will help your advisor develop a roadmap to achieving your financial aspirations.
On the road to financial health
Making financially sound decisions on behalf of your family is one of the most important tasks you'll undertake as a parent. While the process takes time, you can be assured that it will be personally and financially rewarding for you and your family.