What Is Financial Advising and Why Should You Use It?

You probably trust professionals to maintain your car, repair your plumbing and file your taxes. Consider turning to a pro to make the most of your money, too. Here's what you can expect when you enlist the help of a financial advisor. 

What Does a Financial Advisor Do?

According to Investopedia, a financial advisor works with you to manage all aspects of your financial life. That could include:

• Managing your investments
• Creating a plan to pay down student debt, credit cards or mortgages
• Budgeting in a way that works for your lifestyle
• Minimizing your tax bills
• Saving for college, retirement and other big expenses
• Planning for your long-term healthcare needs
• Developing an estate plan

How Do Financial Advisors Get Paid?

You could pay for someone’s financial advising services in different ways:

• A flat fee
• Hourly rates
• Monthly or quarterly fees
• Commissions on the financial products you buy from them
• A percentage of the assets they are managing for you

How Can You Choose a Financial Advisor?

Just like in many other life situations, you can ask your friends and family for a financial advisor they recommend. It’s important to find a financial advisor that understands your needs. For example, if you are focused on saving for a house or paying college tuition, an advisor that works primarily with retirees may not be the best fit for your needs. 

If you don’t have people in your life you can ask, you can try online resources:

• The National Association of Personal Financial Advisors 
• The Financial Planning Association
• BrokerCheck by FINRA, to check advisors’ background and experience

What Is It Like to Work With a Financial Advisor?

Of course, not all financial advisors are the same, and the process will depend on your needs and what you hope to gain from their help.

Generally, you can expect to talk about your goals in the first meeting. CFP recommends asking yourself what you want the financial advisor to help you achieve. If you’re planning to meet your financial advisor with your partner or significant other, it may be beneficial to have conversations about your goals prior to the meeting. 

Your first meeting may be centered around what the financial advisor can offer you and making sure you feel like you’re a good match.

If you decide to go forward, you’ll probably schedule another meeting. If so, you’ll want to ask your financial advisor how you should prepare. It may be helpful to bring:

• Tax returns
• Pay stubs
• Social Security statements, even if you’re not collecting Social Security yet
• Your budget, or credit and debit card statements
• Savings and investment account statements
• An estimate of your pension, if applicable
• Statements for any mortgages, loans or debt
• Insurance policies

Once your financial advisor has a good idea of your goals and current financial situation, you can work together to plan for your future meetings.

Farm Bureau Can Help with Your Finances

It’s important to create a financial plan that gives you the best chance to meet your goals, but it can feel complicated or overwhelming. Contact Farm Bureau to learn what we offer, how the process works and what to expect.