Choosing a Financial Advisor

Many believe that financial advisors are only for those with lots of money to invest. The truth is that working with an advisor is a great choice for anyone that wants to get their finances on track and set goals for their future. Finances affect almost every aspect of our lives, having someone who can guide you along the way and provide sound advice can not only have an impact on your own financial well-being, but also on the lives and futures of the ones you love.   

Choosing a financial advisor is a big decision. Finding someone who fits your needs and who will truly be looking after your best interest and then trusting them to handle your nest egg can be overwhelming.   

Having the right advisor makes all the difference. Below, we’ll discuss some basic information veterans need to know that can help make the process a little easier when choosing a financial advisor.  

What do Financial Advisors Do?  

Financial advisors can help veterans plan for things like sending children to college, buying or paying off a home, and planning for or living in retirement. They can help veterans ensure they are getting the most out of their benefits as well.   

They work to understand your individual situation and goals and will then help you make a plan to meet those goals and create a healthy financial future.  

The Fiduciary Standard  

This is very important. Not all financial advisors and planners are “fiduciaries”. Those who are fiduciaries are legally required to always serve your best interest when giving financial advice. By law, they cannot offer products or services that aren’t beneficial to you just to earn a commission.  

Some advisors act in dual roles as both brokers (making investment transactions for clients for a fee) and advisors, which means they can act as a fiduciary, but they also have the ability to not act as one under certain circumstances.  

Unfortunately, veterans are targeted by scammers and dishonest advisors who are just out to make a commission or access available benefits, so it’s important to ask the advisor you are considering if they are a fiduciary and if they adhere to the fiduciary standard at all times.  

Types of Advisors  

There are three main types of financial advisors –  

Fee Only: In the world of financial advising, fee only advisors are considered to be the best – the gold standard. They charge an hourly fee, a flat fee, or a percentage of your assets. They are not paid any commissions based on selling products or services to you, which makes them more likely to act in your best interest.  

Fee Based: Sometimes confused with fee only advisors, fee-based advisors are advisors who typically work with brokers and may earn commissions when selling you certain investments accounts.  

Commission Based: These are advisors, brokers and insurance agents who are paid a commission based on the sale of a financial product, like an annuity or life insurance policy. These individuals are not required to act as fiduciaries; therefore, they may not keep your best interest in mind and can create a conflict of interest. However, just because a commission can be earned, doesn’t mean it’s not the right fit for you. Do your own research and ensure you understand what you are agreeing to before making any decisions on the financial products you are offered.  

Choosing One that is Right for You  

There is no law that mandates who can and can’t call themselves a financial advisor or provide advice, so you must do your homework to ensure you are choosing one that will work to bring you closer to the future you see for yourself. The right financial advisor for you will have the resources and experience to offer advice that meets your needs and will help you create a plan toward a healthy and secure financial future.  

Veteran Saves is here to support you in your journey. Take the pledge today and we’ll send you tips and resources along the way that will help you make a plan and stay on track.