Are you looking for a financial advisor Hamilton? You certainly have lots of options.
You can go to a bank.
Or a stock broker.
Or your rich Uncle Harry…
But which choice is right for you? You have hundreds of options when looking for a financial advisor in Hamilton. Where do you even start?
We can help!
We’ll explore 3 important steps to follow when looking for a financial advisor. When you understand these steps, you’ll know how to:
- Determine your financial needs
- Decide what type of advisor you’ll need
- Find a financial advisor that’s right for you
We also have a useful Toolkit you can download. It’s a great resource that can help you organize your search for a financial advisor.
So if you want to find a financial advisor Hamilton residents can rely on, this article is for you!
Ready to get started?
Let’s go…
We know that working with an financial advisor might feel intimidating. That’s why we created the Choosing a Financial Advisor Toolkit. It has helpful tips on services to look for, questions to ask and more. Click here to Download
Why work with a financial advisor Hamilton?
Many people work with a financial advisor. Why? Because managing money can get complicated. You may not be comfortable doing it on your own.
A professional financial advisor can help. Financial advisors perform vital tasks, like:
- Helping you develop and execute a financial plan
- Showing you how to save and invest
- Selecting appropriate financial products
- Improving your financial decision making
Financial advisors are not just for rich people. Anyone can work with a financial advisor to get their finances organized.
Follow these 3 steps to find a financial advisor that’s right for you.
Step #1: Determine what you need help with
The first step is to determine what you need. Sounds simple, right? But sometimes you might not know what you need.
For example, think of a kitchen renovation. You might want new cabinets, countertops and backsplash. But you may need to update your electrical, too. A professional contractor can help you get the kitchen you want.
Financial advisors work the same way. A good financial advisor can set and prioritize your financial goals. An advisor will also work with you to help you achieve those goals.
Keep in mind that many financial advisors do more than invest money. But not all advisors offer the same services. So decide which financial services you need and let that guide your search.
What do you need help with?
Here are some areas to consider:
- Investment advice: A financial advisor can help you choose an investment portfolio that fits your risk tolerance.
- Budgeting: Where does all your money go? An advisor can help you track your cash flow and build your savings.
- Debt management: Do you have credit card debt, car loans or a mortgage? A financial advisor can help you reduce your debt quicker.
- Insurance coverage: Do you have dependents? Some advisors can review your insurance coverage to identify gaps or potential savings.
- Tax planning: Want to cut your tax bill? Some financial advisors can help you create a short-term and long-term tax strategy.
- Retirement planning: When do you want to retire? A financial advisor can build a retirement plan and keep you on track.
- Estate planning: Want to leave a legacy? A financial advisor can help you transfer your wealth to your beneficiaries.
- Child education planning: Saving for a child’s education? An advisor can help you access government grants and bonds (i.e. free money).
As you think about your situation, it’s a good idea to write things down. Use the Advisor Services Checklist in our Toolkit to get started. The checklist provides an extensive menu of financial services available from most advisors. It will help you identify, organize and prioritize the services you’re looking for.
Step #2: Decide what type of advisor you’ll need.
Many people call themselves financial advisors, but not all have your best interest at heart. To know the difference, you need to understand the two standards used in the industry: The fiduciary standard and the suitability standard.
The fiduciary standard means a financial advisor is legally required to work in your financial best interest.
The suitability standard means an advisor can sell you a product, as long as it’s suitable for your situation.
Here’s an example that illustrates the difference between the two standards:
Two products are suitable. But one product is more expensive, because it offers a high commission to the advisor. Financial advisors under the suitability standard can recommend the expensive product. Financial advisors under the fiduciary standard must recommend the cheaper product.
In this example, there’s a clear conflict of interest. The best interest of the client conflicts with the biggest payment to the advisor.
The fiduciary standard is the highest standard. Fiduciaries have committed to improving the industry by always putting their client’s interest first. So look for a financial advisor who is a fiduciary.
How are financial advisors paid?
Is your financial advisor a trusted professional, or a good salesperson? Sometimes it’s hard to tell. So it’s important to understand how advisors are paid.
Most financial advisors are paid through commissions or fee for service.
A commission is a fee paid to the advisor whenever an investment is sold. Many investments like GICs and mutual funds pay commissions. This may result in a conflict of interest.
Conflicts of interest occur in many professions. For example, dentists are paid based on the work they recommend. So the existence of a conflict is not necessarily bad. What’s important is having an open discussion with your financial advisor on any conflicts that exist and how they’re handled.
The other payment method is fee for service. These arrangements charge a flat fee, like $1,500 for a financial plan. Or they can be an annual fee, like 1% charged on the assets invested.
Is it worth hiring a financial advisor Hamilton?
Recent research shows that financial advisors who provide comprehensive services provide significant value.
In fact, one study shows that behavioral coaching and tax planning provide over 3% in value. That’s more than the 1% financial advisors typically charge. (Source: “2021 Value of an Advisor Study.” Russell Investments.)
How much help do you need?
Do you prefer to delegate things, or are you more hands on? The answer to these questions will help you determine how much help you’ll need.
Another factor to consider is your financial knowledge. Less financial knowledge typically means more professional help.
Financial advisors differ in terms of the services, products and how much they charge. At one end of the spectrum are robo-advisors. Robos generally don’t provide a financial plan, ongoing service, or guidance. For the most part, robo advisors fit investors into a short list of funds, and provide a phone number to call in case of questions.
Source: Russell Investments
At the other end of the spectrum are family wealth advisors. These advisors have a personal relationship with their clients. They have a deep understanding of the family situation, which allows them to provide comprehensive wealth management services. They also provide emotional support and stability during volatile economic times.
What type of advisor is right for you?
Now is a good time to review the checklist you created from Step 1. The more items on your list, the more professional help you’ll need.
Here’s an example: Let’s say you need help with investing, debt management and retirement planning. Also, managing money is not your strong suit (i.e. you would rather do anything else).
In this case, a financial advisor who provides comprehensive services is probably a good fit.
Step #3: Finding a Financial Advisor Hamilton
You should now have an idea of the financial services you need (Step #1), and the type of advisor to look for (Step #2).
Now it’s time to find a financial advisor. Where should you look?
- Banks and Credit Unions: These institutions have internal staff who sell certain types of investments, like term deposits, guaranteed investment certificates (GICs) and mutual funds. Most sell proprietary products only.
- Stockbrokers and mutual fund dealers: These individuals can help you buy or sell investments such as stocks, bonds or mutual funds. Most focus only on investments.
- Insurance companies: These companies have employees licensed to sell investment products such as mutual funds, segregated funds and annuities. Insurance companies also offer various types of insurance products.
- Independent financial advisors: These advisors offer financial advice, and may sell financial products. Some charge you a fee, while others are paid by the companies whose products you buy. Independents are not tied to proprietary products, so they can shop around to find the best solution. Many independent advisors are also fiduciaries.
Check a financial advisor’s registration and credentials
Once you find a good candidate, it’s important to check their registration. By law, financial advisors who sell investments must be registered with a provincial or territorial securities regulator. Use the Canadian Securities Administrators’ National Registration search to check their registration.
You should also check an advisor’s credentials. For example, the CFA Institute has a public directory of members. It contains a current list of CFA charter holders.
First meeting and questions to ask
Now you’re ready to reach out. Setup a call or first meeting with the advisor. Personality and rapport are important in making your selection. Your first conversation will help you gauge your comfort level working with that person.
In your first conversation with an advisor, be prepared to ask questions. Not sure what to ask? Use the Questions for Advisors section in our Toolkit. It will help you start a meaningful conversation.
The toolkit also has a Financial Changes in Life section. This section can help you focus the discussion on some of your unique needs.
The Bottom Line
Creating a plan to help you achieve your goals requires expertise. Many people choose to work with a professional. Financial advisors have the experience and resources to help guide you. Use our toolkit to find the right financial advisor for your situation.
Toolkit: Choosing a Financial Advisor
Download the “Choosing a Financial Advisor” Toolkit to get started. It will show you how to:
- identify the services you need
- ask important questions
- choose the right financial advisor