The Benefits of Hiring a Financial Advisor

10/25/2022

If you are interested in learning more about how to ensure your financial future as an expat, you may have considered working with a financial advisor. Here are some of the benefits that come from working with a performance fee-only financial advisor, who will help you take control of your finances and grow your assets over time through sound investing practices.


Why do you need a financial advisor?

If you are not investing now for retirement, it's probably because you don't have enough money to invest. But if you want to build wealth, that's only going to happen through investments. You need an expert: someone who can help guide your investments in a way that's aligned with your needs, goals and risk tolerance. This person is called a financial advisor. We can offer sound advice based on our experience and expertise that will help make sure you get back what you put in.

So how do you know if you need an advisor? If your investments aren't doing well, or if you're not sure about where to invest your money, it's probably time to consider enlisting help. If you want professional guidance but don't have much to invest right now, there are professionals who can help walk you through what should be considered even if your portfolio is small.


Who do I need to find?: There are many different types of financial advisors out there and they serve different purposes. But no matter who you work with, it's important to make sure that your advisor is properly licensed. You want to be sure that you're getting advice from someone who has enough education.

What does a financial advisor do?

Typically, an advisor is someone who acts as your liaison with financial institutions. We can help you find low-cost funds or offer personalized advice for investing in stocks or other assets to achieve your financial goals. 

Choosing an advisor is more important than most people realize. After all, you are entrusting us with your money and future goals. The bottom line is that you need to do your homework before bringing in anyone to act as your trusted advisor. If you get along well with someone and feel like they're talking your language, then it might be time to consider making an appointment.

If you do decide to hire an advisor, you can expect your relationship with us to evolve over time. Initially, we want to get to know you and your financial goals by asking questions about how much money you make, how much debt you have and what your priorities are. Once we understand what drives your financial decisions-and how much risk is involved-we can help chart out a plan that takes into account all of these factors. 

Finding the right financial advisor for you

Some financial advisors are independent and provide investment advice on a performance fee-only basis; others work for mutual fund companies and/or insurance companies, which mean they are salespeople. If you prefer not to have to worry about conflicts of interest where a party is trying to sell you something, then work with a performance fee-only advisor for sound investment advice. If you're going to hire someone as your personal CFO (Chief Financial Officer), it's best that they focus on serving you, rather than serving themselves!

Once you have decided that you need some help, there are a few things to look for in an advisor. The first is if they are a fiduciary or not. This means they operate under strict ethical rules to always place your best interests above their own. You also want to make sure they aren't compensated based on selling you financial products, so they won't be tempted to put their interests ahead of yours with pushy sales tactics or by steering your investments toward products that pay them fat commissions.

What to consider when hiring an advisor

  • What are your goals?
  • Are you willing to pay a performance fee?
  • What conflicts of interest should I be aware of?
  • Do they have legal and regulatory licenses that can protect me from fraud and misconduct?
  • How much will it cost to set up and maintain an account with them?
  • Is this a better way to save than with a robo-advisor?
  • Do I need estate planning, insurance, or tax advice in addition to financial investment advice.
  • Is my chosen financial advisor credible and held accountable by licensing/certification bodies, etc.?
  • Most importantly: do I like them, trust them, do they make me feel comfortable asking questions and can they articulate how they think about money.

In today's fast-paced financial world where technology is reinventing our experience with investing, an advisor can bring you peace of mind. To find one, ask yourself what your goals are and how much time you want to spend managing your money. With that in mind, take some time to do your homework on potential candidates. Then sit down with at least two potential advisors for face-to-face meetings to discuss their services and make sure they fit with your personality before deciding who to hire. If you don't feel comfortable about someone during or after those meetings, don't hire them!

A good way to get started is to ask yourself what you want from an advisor. The first step in getting your financial life together is to figure out where you stand and make a plan for getting to where you want to be. It's not always easy, but it's worth it if you want to feel more confident about your future. To help get things started, here are some considerations.

How much does it cost to hire an advisor?

Hiring an advisor does come with some costs and fees. It depends on several factors, including what kind of service you are looking for and how many assets you have in need of management. According to Investopedia, individual investors typically pay 1% to 2% of their portfolio value annually in advisory fees-while smaller accounts may pay as little as 0.4%. Of course, there is no set rate; it really depends on the quality of service provided.

Fees aside, it is important to understand that you may also need to pay taxes on any investment gains you accrue while working with an advisor. In some cases, you may even be required to pay capital gains tax regardless of whether or not your investments actually made money-in certain instances, if an investment makes less than $3,000 in total profit for example, it's taxed at your regular income tax rate. If fees and taxes eat up too much of your potential returns from investing on your own, then hiring an advisor might seem like a better option. In other words: it can cost less to hire an advisor if you think its value will outweigh those fees and taxes over time.

How can an advisor help me?

Perhaps you're saving for retirement, and want to make sure your plan is on track. Maybe your family is going through an emergency and you need some financial advice-fast. In situations like these, hiring a financial advisor can be really helpful, because he will be able to take over at those moments when you don't have time to figure things out yourself. He will create a detailed roadmap for your future financial goals, helping you make informed decisions along the way.

If you're currently looking for a financial advisor, there are several things to consider. Before deciding on an advisor, you should always ask about potential conflicts of interest in his business relationships and whether he charges a performance fee or gets paid commissions. One last thing to think about: How will your new advisor help you manage your finances? Will you meet face-to-face, have frequent phone/video calls or just exchange emails? You'll want to make sure that you both feel comfortable with how communication will take place throughout your relationship.

Selecting the right professional

Before you commit to a financial advisor, it's important to ask yourself how much time and effort you're willing to invest in your relationship with them. Having someone work closely with you who is personally invested in your success makes sense from both an emotional and professional standpoint. However, if you have other commitments and can only schedule meetings during certain times, for example, hiring someone who is available on nights and weekends may be more convenient for you. No matter what path you choose, make sure that your advisor has experience working with expat clients and has expertise in areas such as taxes or retirement planning where they'll be handling money-related tasks for you.

Once you've gotten an idea of what you want in a financial advisor, it's time to start meeting with people. Before your first appointment, take some time to think about what questions you have and what issues are most important to you. It's also worth thinking through any advice you have heard or read and compare it with what your potential advisors have said so far-this will help you identify which planner is actually going to work best for your situation. Finally, ask yourself whether these meetings feel comfortable-when it comes to money, relationships matter more than almost anything else.

Once you've narrowed down your list to one or two financial advisors, it's time to start interviewing them. During these meetings, ask questions about any concerns you have and consider what they would do if they were in your shoes. If they don't give specific answers or sound uncertain during their response, find out how they would handle that situation-this will help you understand how willing they are to work with your unique needs. To finish up each interview, tell them about your biggest concern or worry-and then listen closely for any ways in which their advice helps.

Starting off with an interview

Now, your task is to start with an interview. Say you are interviewing for potential financial advisors, what will you ask them? You can use some very basic questions as well as some more specific ones based on how many years they have been in business, what services they offer and how much money you want to invest. Here are a few examples:

  • What made you get into financial planning?
  • How long have you been doing it?
  • Can I review your background checks and/or certifications?
  • How do you help someone achieve their retirement goals?
  • What fees do you charge and why is that fair?
  • Do you provide advice or just manage assets?
  • Are you a fiduciary?
  • Do you have any conflicts of interest?
  • What types of assets do you focus on?
  • Why should I trust you?
  • How do I know if your advice is working or not and how often are we supposed to review my plan together so that it can be fine-tuned when needed?
  • What is your investment strategy and what benchmarks do you use to determine if my portfolio is growing or not?
  • Can you guarantee that I'll always get positive returns, even during a recession?
  • Is there anything else I should know about your services.

Communicating with your advisor

Whatever your financial questions or needs, it's essential to work with someone who makes you feel comfortable and confident. Ask for help communicating with your financial professional-don't just leave your money in his or her hands without knowing how it's being managed. If you don't understand an investment decision, say so. Your advisor should be able to clearly explain his reasoning, and if he doesn't, get a second opinion from another expert. If you still have questions after receiving explanations or consulting others, ask some more. It's better to spend extra time understanding exactly what is happening with your investments than to invest blindly.

Is there anything else I need to know?

While there are benefits to working with an advisor, you do need to be aware of potential conflicts-of-interest that may arise. If your advisor has other sources of income such as asset management fees or commissions, you might not be in their best interest because they'll get paid regardless of whether they make good investment decisions or not. The best way to ensure that your advisor is putting your interests first is to make sure they're performance fee-only and also have no conflicts-of-interest. You should always discuss fees, compensation and any potential conflict-of-interest before hiring an advisor.

How Expat Wealth At Work can help

You should know that in making any financial decision, there are risks and rewards. You may not see them immediately, but over time these can be realized. That is why we are here for you, to help inform you and protect your money from any unnecessary risk or damage. We will help keep an eye on your investments so you don't have to worry about where your money is going.

It is very easy to lose track of what your money is doing and where it's going. For some people, that's enough reason to seek out help from an advisor. 

We give you personalized advice on how to invest your money and point you in directions for growth that fit within your financial plan. We also keep a watchful eye on any investments you may have made or are thinking about making. Contact us for a no-obligation meeting: hello@expatwealthatwork.com