For most people, there’s usually a point where their financial life becomes complicated enough that they realize it’s time to hire a professional. This could be at any stage of life; it’s more about the individual situation and how an advisor can help.

Here are a few common situations:

• You have equity compensation and need to understand the benefits, the process, and how to minimize the tax impact
• You want to enjoy your life now – but want to create the option to retire early, or for one spouse to stop working
• You have young kids to save for, aging parents that need help, and you want a secure retirement
• You’re ready to retire and need to create income from your savings

The above situations are very different, and the advice a financial advisor would provide in each would be specific to the problems and the needs of the individuals involved. While each of these scenarios involve money, the solutions go beyond simply managing investments or advising on how much to put away in savings.

In each of these, a financial advisor can work effectively across an entire financial plan to incorporate necessary elements. Cash flow planning, multi-year tax planning, investments that maximize flexibility and opportunity, retirement savings, and estate planning are all part of what an advisor can bring to the table.

But the most critical piece is in listening to you, helping you understand what you want to accomplish, and helping you create a plan to get there.

Assessing Your Needs

The first step to hiring a financial advisor is understanding what you need. Are you someone that likes to manage your investments but needs financial planning to pull all the pieces of your life together?

Or do you want someone to take charge of all aspects of your financial life? Is there a specific issue you want help with? Do you want someone to be a partner for years to come, or do you need someone to create a plan and teach you how to move forward on your own?

If you have a partner, think about what you want to accomplish as a couple. Do you have the same priorities? Do you think about money the same way, or do individual spending or saving habits cause stress in your relationship?

Taking the time to think about your needs can put you on track to find someone who matches you. For example, if you’re starting out, you don’t want to hire someone specializing in retirement.

You want to have a clear understanding of your needs, challenges, goals, and personal style so you can find an advisor that can relate to you. They need the skills and experience to solve your problems and create a plan matching your goals.

How Do They Charge?

Financial advisors have many different models for the fees that they charge. This is a good thing because it allows you to find the model that works for you.

One-time fee: This is a one-time charge for financial planning advice. The relationship isn’t meant to be ongoing. The advisor will meet with you, gather information, and create a plan. You’ll usually review it together to make sure it works for you, and they’ll incorporate necessary changes. You’ll be responsible for implementing the plan over time.

Ongoing (subscription) fees: These are charged monthly or quarterly and reflect a relationship anticipated to last potentially for years. For many people, working with a financial advisor is a lifelong relationship, and the fees are well worth the advice, support and partnership provided. Some advisors offer fees based on the complexity of the financial plan.

Assets under management fee: This is a percentage of the total assets under management that the advisor is responsible for.

Within these broad categories, advisors may create different combinations of fees or charge a flat fee. The most important thing for you is that the advisor should be completely transparent about all the fees charged. You should know exactly what you are paying for.

Can You Work with Them?

This is subjective – but don’t neglect it. For the relationship to be successful, you’ll need to disclose personal information about your finances, income, debts, issues with money, history, etc.

It can be very uncomfortable to tell someone about situations where finances were precarious, or you made big mistakes that need cleaning up. You also need someone who relates to you and your style, and if you have a partner, you both need to be comfortable with the advisor, and the advisor should always consider both partners’ desires.

Many advisors will offer an initial consultation by call, meeting, or Zoom to get to know you and allow you to discover and assess them. They’ll tell you that the relationship needs to be a good fit – and they mean it.

They want to help you succeed, so be sure you ask questions and allow yourself to understand what they do and if you are comfortable with it. Do you like them? Do you trust them? Do some research, spend time on their website, and check out their social media.

The Bottom Line

Working with a financial advisor can be one of the most productive professional relationships you’ll have. You can structure the relationship any way you want to reflect your style, needs, and comfort level.

Whether you want an advisor who will be a partner for many years to come, who will be your “first call” no matter what happens, or if you like to DIY your money and need some help creating a plan you can implement – there’s an advisor for everyone.

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About

Collabria Capital, Inc. is a San Francisco-Bay Area fee-only fiduciary financial planner& investment manager providing wealth management services to clients locally and virtually throughout the US.

Paul Saad, Co-Founder at Collabria Capital, Inc, is a CERTIFIEDFINANCIAL PLANNER™ (CFP®) focusing on comprehensive financial planning, personalized investment management, and equity/variable compensation.

This work is powered by Seven Group under the Terms of Service and may be a derivative of the original. More information can be found here.

The information contained herein is intended to be used for educational purposes only and is not exhaustive. Diversification and/or any strategy that may be discussed does not guarantee against investment losses but are intended to help manage risk and return. If applicable, historical discussions and/or opinions are not predictive of future events. The content is presented in good faith and has been drawn from sources believed to be reliable. The content is not intended to be legal, tax or financial advice. Please consult a legal, tax or financial professional for information specific to your individual situation.

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