When you think of a financial advisor, you might wonder: Financial advisors help people with their money, but I’m good with my money. Why would I need one?
A financial advisor is more nuanced than having a responsible keeper for your funds. An advisor can help strategize investments, plan for retirement and taxes, manage trusts and assets, and secure cash flow. But that’s just the beginning. Depending on what you need, there’s an advisor that can help.
Key Takeaways
• Understand what a financial advisor is and what they do
• What to consider when choosing a financial advisor
• The costs and fees of working with an advisor
• The advantage of a fee-only fiduciary
• The benefit of having an advisor
• Questions to ask your advisor
Who Needs a Financial Advisor and How Do I Know When I Need One?
Maybe you don’t know the specific reason you need a financial advisor. Maybe you’re beginning to think about retirement, even if you’re years away from it.
Here are a few reasons an advisor might be of help:
• Approaching retirement: You are within five years of retiring and need a concrete plan to transition from accumulating wealth to safely distributing it.
• Lacking time: You prefer to focus on your family, career, or hobbies rather than spending hours tracking daily market movements and rebalancing portfolios.
• A major life event has happened: You’ve inherited money or assets and need help managing and/or distributing them.
• Own a business: You’re a business owner with complex assets and require professional oversight.
How Do I Choose One?
Choosing the right wealth manager is a pivotal decision that directly shapes your financial future. Understanding your goals and preferences, and how a firm’s services compare is key.
What to consider when choosing a financial advisor:
• Your needs vs what the firm specializes in
• Advisory costs
• The firm’s credentials and management history
Financial Advisor Cost
The fees and costs of a financial advisor vary depending on the firm and services. Some advisors have flat fees, hourly rates, or work on commission. Others, like Midwest Capital Advisors, are a fee-only fiduciary.
Ways financial advisors charge include:
• Assets Under Management (AUM): A transparent percentage fee based on the total value of the portfolio being managed.
• Flat or Retainer Fees: A fixed, predictable dollar amount charged annually or quarterly for financial planning.
• Hourly or Project-Based Fees: A direct rate charged strictly for the time spent building a specific, standalone plan.
• Commission-Based: Fees earned by selling specific financial products, policies, or mutual funds.
The Fee-Only Fiduciary Advantage
At Midwest Capital Advisors, we operate strictly as a fee-only fiduciary. This means we are legally and ethically bound to always put your best interests first. Because we do not work on commission or hidden fees, we reduce potential conflicts of interest that often plague traditional financial institutions.
We charge a transparent annual percentage based entirely on the size of your portfolio, billed quarterly in arrears.
Are Financial Advisors Worth it?
Whether a financial advisor is worth it is up to your financial situation, lifestyle, and preferences. As you near retirement, the help of an advisor might be more dire than before. Between managing your assets, preparing for being without a consistent income, optimizing your Social Security timing, mitigating tax burdens, and concerns about steady cash flow — an advisor can be a guiding light.
Questions to Ask a Financial Advisor
Hiring a financial advisor can bring up a lot of questions — or leave you unsure of what to ask in the first place. Here are some questions to ask during your first meeting:
• Is the firm a fiduciary?
• What are the firm and advisors’ credentials?
• How is the firm paid? Are there any hidden fees?
• What’s your investment strategy?
• How will this relationship work?
• What will communication between me and the firm look like and how often will we meet?
• How do I access information about my portfolio and status of investments?
Plan Your Financial Future
An advisor takes the stress out of tax management, retirement preparation, and complex business assets. Whether you want to lift the burden of daily market monitoring off your plate or need advanced strategic advice, our team of skilled wealth advisors and financial planners are here to guide you.
We make getting started simple, straightforward, and collaborative through our three-step onboarding process:
• The Introductory Meeting: We get to know your values, goals, and concerns while introducing you to our team.
• The Collaborative Planning Session: Together, we dig into the details to map out the framework of your financial plan.
• The Recommendation Meeting: We present your customized strategy and begin executing the plan to protect and grow your wealth.
Your goals are our mission. Contact us today to schedule your complimentary introductory meeting.
FAQs
• What is a financial advisor and how do I know if I need one?
A financial advisor manages investments, designs retirement roadmaps, structures tax reduction strategies, and helps preserve wealth. You should consider hiring one when your financial situation becomes too complex to manage alone, or when major life events like retirement or an inheritance require expert strategy.
• How do I choose a financial advisor?
Focus on finding a firm whose specialization matches your current stage of life. Always verify their credentials, insist on complete fee transparency, and confirm whether they operate under a continuous fiduciary standard.
• What is the cost of a financial advisor?
Costs vary by firm structure. Traditional advisors may charge commissions on financial products, while fee-only fiduciary firms like Midwest Capital Advisors charge a transparent percentage of assets under management, ensuring zero hidden fees and reduction of potential conflicts of interest.
• Are financial advisors worth it?
Whether a financial advisor is worth it is up to your financial situation, lifestyle, and preferences. An advisor helps maximize tax efficiency, prevents emotional investing mistakes during market downturns, and ensures you do not outlive your savings.
• What questions do I ask a financial advisor?
Some key questions to ask a financial advisor include:
• Is the firm a fiduciary?
• What are the firm and advisors’ credentials?
• How is the firm paid? Are there any hidden fees?
• What’s your investment strategy?
• How will this relationship work?
• What will communication between me and the firm look like and how often will we meet?
• How do I access information about my portfolio and status of investments?
• How can Midwest Capital Advisors help?
Midwest Capital Advisors is here as your trusted fiduciary. We are an independent, Michigan-based, SEC-registered investment advisor. When you schedule a meeting, our team will work with you to strategize a plan that makes your financial needs and goals possible.
Emma Dale is the Marketing and Communications Associate at Midwest Capital Advisors.