Are you thinking of turning to a qualified financial advisor? Scottsdale, Arizona, and the Greater Phoenix area are full of options that will meet your long-term financial goals, so what’s the easiest way to choose a financial advisor? At ARQ Wealth Advisors, we wanted to put together a quick breakdown of what key factors to look for in a financial advisory firm to ensure that you select the right choice for yourself and your family. As this is a long-term partnership, it’s key to do your due diligence to see which firms out there would be best suited to meet your financial advisory needs.
What Is a Financial Advisor?
If you want to learn how to leverage financial strategies to grow the money that you’ve worked hard to save up during your career, it might be time to seek the services of a financial advisor. Scottsdale individuals do much better with someone on their side has the experience studying changes in the markets and knowing optimal portfolio balancing to meet your specific retirement and wealth goals. Financial professionals work toward helping clients handle and expand their asset base, budget more effectively, manage debt, and plan their desired retirement.
These wealth consultants or investment advisors give direction about where to put money, how and when to sell assets, how to leverage new projects, and much more. Whatever their official title, it is best to look carefully at the firm’s qualifications and experience before committing your hard-earned wealth.
Who Needs a Financial Advisor?
It can be overwhelming living in a crowded area like Scottsdale where there are seemingly endless options of various types of financial advisors and financial products that they are trying to sell you. You can learn everything you need to know about investing online, but the vast amount of conflicting information will soon convince you of the worth of a local financial advisor. Scottsdale firms like ARQ Wealth Advisors are fully equipped to offer a tailored financial and retirement plan for your unique situation and circumstances instead of one-size-fits-all approaches searched online.
It’s crucial to keep current in the financial industry. Regulations change, and the long-term care of investments entails regular reviews and tweaks of your portfolio. As you progress through the different life stages, it’s also essential to review your investment goals and ensure you’re on track.
Speaking to our financial professionals ensures that you receive the correct advice for your:
- Life stage
- Risk profile
- Current financial circumstances
- Investment goals
- Tax situation
Seven Tips for How to Choose The Right Financial Advisor—Scottsdale, AZ
The ARQ Wealth Advisors team gives the following advice for finding reliable wealth management firm in Scottsdale:
#1 Investigate Certifications
It’s simple to qualify as an investment professional, so investigate the qualifications of your potential financial advisor. Scottsdale planners should have leading certifications that include charter support and other reliable certifications, like:
- A Chartered Financial Analyst® (CFA®) has a great deal of expertise in portfolio management, banking, investing, and securities. A CFA® receives this globally recognized designation that displays their advanced knowledge and competence to provide guidance on money management and securities analysis.
- A Certified Financial Planner® (CFP®) specializes in financial planning, taxes, insurance, estate planning, and retirement services such as 401k plans. A CFP® not only complete initial examinations but also are required to complete continued education to ensure that they are always up to date on the constantly changing financial planning world.
- A Chartered Financial Consultant® (ChFC®) certification covers mainly estate planning and employee benefits planning and requires continuing education. As there are many financial firms out there who simply use a one-size-fits-all approach, ChFC®-designated individuals can offer a wider array of services with guidance of estate planning and employee benefits planning.
- A Retirement Income Certified Professional® (RICP®) certification covers a financial professional who has a specialization in retirement income planning. Individuals with the RICP® designation help provide financial advice to retirees and those nearing retirement on the best strategies to use the assets they’ve saved throughout their career throughout their retirement.
- A Accredited Investment Fiduciary® (AIF®) certification covers how a financial advisor can conduct themselves in an ethical manner and ensure they are acting in accordance with the principles of being a fiduciary and looking out for their client’s best financial interest.
- A Chartered Life Underwriter® (CLU®) is an expert in estate planning and insurance. This certification not only covers the technical knowledge of life insurance products and estate planning, but also makes a large emphasis on ethics in financial services to help ensure professionalism from the designed individuals.
ARQ Wealth Advisors comprise a number of these skills across their team, including a partner-level retirement specialist and several certified financial planners with many years in the industry.
#2 Check The Services
The terms financial advisor and financial planner are used interchangeably. However, a financial advisor typically provides advice about wealth and investment management in Scottsdale. A service like ARQ Wealth Advisors will assist with monitoring your portfolio and making adjustments as necessary.
Advisors assist their clients in meeting their long-term financial goals and growing their wealth. As the investing individual, you can choose the level to which your financial advisor has control of your finances. Some investors prefer to have full discretion over every single decision and others hand over more responsibilities to their financial advisor to recommend investments to match their risk portfolio and life stage that they are in.
Financial planners perform a similar function but create a blueprint for you to follow. With financial planning, you either implement the steps yourself or ask the planner for assistance or networking contacts. You may also hire a planner for a specific aspect of your finances or a project.
Most reputable services like ARQ Wealth Advisors assist with:
- Setting financial goals
- Investment management
- 401 k plans and other retirement plans
- Estate planning, tax planning, and legally reducing your tax burden
- Income planning
- Education saving planning
- Cash flow analysis
- Debt management
- Small business planning
- Charitable planning and legacy funds
- Risk management and reduction
- Insurance planning
- Portfolio management
If you need the ARQ Wealth Advisors for comprehensive investment management and financial planning services, feel free to ask us to design your blueprint for wealth generation and responsible management.
#3 Research More About Fiduciary Financial Advisors
Financial advisors work independently or as part of an extensive network. They may work with specific investment companies or several options. You’ll also find advisors, LLC experts, and legal teams in brokerages, banks, and investment companies.
What is the primary difference between a FINRA-registered planner and a fiduciary planner? Both provide financial advice, but only the fiduciary planner is legally compelled to put their client’s interests before their own. Should a fiduciary planner provide incorrect advice, they may have to prove it was the right advice at the time by presenting evidence.
Any advisory firm that controls $100 million or more in assets must register with the SEC, and advisors from smaller firms generally register with their state authority. It is in their best interests to represent your interests flawlessly, and you will benefit from choosing an official fiduciary planner over a general FINRA-registered service only.
#4 Follow FINRA Disclosures
Check the FINRA website before committing to a financial advisor. Scottsdale financial service providers will appear on this registry alongside any complaints against them. The site lists complaints and infractions of which FINRA is aware.
Registered financial advisors’ profiles will appear on the record, and complaints or violations will give you a better idea of their track record or problem areas. It is key to do your due diligence to ensure that the firm you are handing over your life savings to in order to invest has a clean record with FINRA and other regulators to avoid any future headaches and pitfalls.
#5 Ask Questions
It’s wise to meet with the financial planner. Scottsdale financial service providers that give you ample options to meet face-to-face will help you get a feel for if that specific advisor / firm is a good match for you, as this is a long-term partnership. It’s also easier to see whether your goals and theirs are similar in a real conversation.
We recommend putting together an extensive list of important questions that you’d like answered from the prospective financial advisors that you will meet with in person. Scottsdale firms like ARQ Wealth Advisors take the time to sit down with you and go over what your financial and retirement goals are and then will assess your risk to see if it would be a good fit to work together in the future.
Frequency and Methods of Communication
Investors need to know when and how often their financial adviser will contact them. Will the advisor review your portfolio and update you on progress? Are quarterly or annual appointments enough for you?
It’s critical to find an advisor or planner that will communicate with you in the way you find most comfortable. How often you should meet depends on the complexity and the level of control you want over your investment portfolio. You may also want to meet whenever there are changes on the horizon.
Recently, meetings are held remotely on different apps or via phone call or email. It keeps the rapport of the in-person meeting without the health risks, but personal meetings are still an option if that’s what you prefer.
Assessing a Prospective Client’s Risk Tolerance
Another area to consider is whether their risk tolerance matches your own. If you’re due to retire in five years, it’s not ideal to choose an investment manager with an affinity for high-risk portfolio choices. If you still have several years to tend to your portfolio, you might not mind a manager with some risk tolerance who can source amazing opportunities.
Unfortunately, many Scottsdale financial advisors offer a one-size-fits-all approach and do not take the time to learn what unique and customized plan will help each specific prospective client. At ARQ Wealth Advisors, they take the time to make sure each financial plan matches a given prospect’s unique circumstances.
What Financial Expertise Do They Offer?
Does your situation match your advisor’s typical client base? Do they have the expertise required to handle your portfolio? For example, if your advisor is an expert in retirement planning, are they the best match to assist you with your short-term goals?
What information will they require, and how in-depth will they go into the analysis? For example, ARQ Wealth Advisors does a thorough needs analysis before giving any recommendations.
Other questions to include:
- Can do they assist with estate planning?
- Will they help you file your tax return or handle tax-related questions?
- Do they recommend insurance products in their suite of financial products?
- Do they have a succession plan if something happens to your personal planner?
- Is the advisor able to refer you to another professional or firm if they don’t offer the services you need?
#6 Consider the Fees
One of the primary reasons people avoid financial planners is the perceived cost. Low-cost mutual funds and other simpler financial products may seem as the more cost-efficient plan, but making common mistakes that beginners make can cost you much more in the long run than any associated fees that a financial advisory firm may charge.
Advisors typically choose one of three fee structures: fee-only, fee-based, and commission. It gives you the flexibility to decide how you want to pay your advisor and what works best for your investment strategy.
Fee-only financial advisors charge for advice rather than selling products. The fees are usually based on the percentage of the assets under their management. When your assets appreciate in value, everyone earns more.
The advantage of this fee structure is that it allows your advisor to remain completely objective. They are paid whether you act on their advice or not, and they won’t push you into an investment plan to ‘sell’ their products.
Fee-based advisors also charge a percentage for managing the assets in your portfolio. The rates are likely to be lower than that of the fee-only firm because the advisor also earns a commission on the products they sell.
These planners typically offer their services for free. Their income is derived from a commission on the products they sell. While it seems like a good deal, not paying for financial advice might prove costly when the advisor chooses the best products for your needs from a very limited range of products on which they earn a commission.
#7 Investigate Potential Conflicts of Interest
Reliable financial planning firms like ARQ Wealth Advisors will be happy to answer questions about their fee structure to give a quick breakdown and provide transparency to prospective clients.
Are They Independent or Affiliated to a Specific Investment Company?
Find out upfront whether the advisor is affiliated with a specific company. If they are, it could mean a conflict of interest clouds their judgment and those firms are not looking out for the best interests of their clients. It often is much more beneficial to deal with firms who independently choose investment products that best suit their client’s financial risk tolerance and retirement goals.
Do Their Goals Align with Yours?
If the goal of a financial firm is for you to invest as much as possible with them, they may try to brush off your concerns and push you into commitments. ARQ Wealth Advisors prefers to take it slowly so that you have time to do your own research and ask meaningful questions about how we can help with your investment.
Set your financial future on the right track with ARQ Wealth Advisors. Call us today at 480-214-9572 or visit our website to schedule an appointment with a financial advisor. Scottsdale, AZ, has relied on us for many years, and we have a passion to go above and beyond for our clients to help them work towards their financial and retirement goals.