Why having a trusted financial advisor is important

The importance of a financial advisor

Choosing a financial advisor is an important decision. The benefits of having a professional to help you navigate the financial landscape over the long-term are clear when you look at the data. Several benchmark studies show that individuals that utilize a financial advisor generally outperform those who go it alone.

But what do you need to know about finding a financial advisor, taking advantage of their experience and resources, to ensure you get the right trusted advisor.

This article will help you understand what a proper fiduciary can do, and why it’s important to have a trusted financial advisor.

What is a financial advisor?

At the most basic level, a financial advisor is a professional that can provide financial services to a client based on their unique financial situation.

But as you will see, not all financial advisors are created equally, and there are definitely some important differences in styles, services and offerings, and responsibilities. Grinnell Wealth Management offers local financial services to our clients, through vetted, qualified fiduciaries.

What services does a financial advisor offer?

The services offered by a financial advisor differ between advisors, and the firms that back them, but may include the following:

• Portfolio Management
• Retirement Planning
• Tax Planning
• Legacy or Charitable Planning
• Education Savings Planning
• Cash Flow Analysis
• Insurance Planning.

How can you benefit from using a financial advisor?

One of the studies mentioned in the first paragraph was a Vanguard study done in 2019, that showed individual investors that worked with a financial advisor achieved a higher rate of return over the long-term (8% annualized over 25 years in this study) versus those that invested without an advisor’s help (5% annualized).

A professional financial advisor can access institutional level tools and resources. They have experience that gives knowledge and insight into different investments and market cycles. The right fiduciary can help you weather inconsistencies in the market, and understand historical returns and future opportunities that may align with your specific needs and goals.

What can you look for or ask that will help you determine if a Financial Advisor is trustworthy?

Below we highlight some important considerations when looking for a financial advisor to help guide you through the investment landscape, even beyond stock trades, mutual funds and the like. A proper fiduciary and their support team should be able to offer you a complete portfolio of financial services that can help you from a financial perspective.

The most important consideration is regarding the foundation upon which these services are built – is that foundation solid?

Things to consider when selecting a financial advisor:

• Does the potential advisor have a good reputation?
  • History of experience in the field?
  • Well regarded in the community?
• Do they take a proactive approach?
• Are they able to inspire confidence and trust?
• Do they take a holistic view of your finances?
• Is there a good support team in place?

Other important factors when considering a financial advisor

What are their core values?

Does the financial advisor align with your own morals, ethics and general viewpoints – a proper financial advisor won’t just be a “yes” person. They will advise – they will also seek out clients that align with their general investment ideologies to ensure that a healthy, comfortable relationship can be built. But they will fundamentally be honest, well prepared and eager to help you achieve measurable success in your financial planning.

What is their level of expertise

Do they take their career and education as seriously as you would desire? Are they invested in continuing education and does their historical behavior offer insight to that alignment?

Transparency and Professional Customer Service

Are they up front about fees and exposures, risks, and other factors? Are they reasonable about potential gains and utilizing best practices in estimating or planning for financial goals?

Do they answer your calls, and help you to navigate systems? Are their team members prioritizing your needs when you are in contact with them?

Will the financial advisor take the time to make sure you understand your investments?

You are in charge of your financial future – even if you rely on a fiduciary to help you make important decisions. You should have an expectation of an advisor that they will help educate you on offerings, and on your specific decisions. You should also have the type of relationship that allows an advisor to help you see what is possible, and what is new in the various investment channels you may be utilizing progressively.

Is the financial advisor a fiduciary?

This is a straightforward question, even if the answer isn’t always clear up front. A financial advisor is either a fiduciary or they are not. This is an important distinction to understand.

Why is a fiduciary important?

The most important part of the “fiduciary” distinction, is that a fiduciary is ethically bound to act in a client’s best interest.

Many “advisors” are pushing specific products that may not necessarily align with a client’s best interest. There may be higher paying commission products, or other incentive-based programs that could reduce the potential positive impact for a client. These are not fiduciaries.

This isn’t to say that a financial professional that is not a fiduciary cannot be a good advisor – rather, that a fiduciary is engaged in working to satisfy a client’s needs first and foremost. A fiduciary has ongoing training, and ethics requirements which help them to maintain this high level of professionalism and work for the client instead of just their own gains.

Other benefits of utilizing a proper fiduciary:

• A good financial advisor can help you to become more comfortable in talking about your money while offering a potential for greater accumulation
• Offers a sounding board which can help you explore ideas and give your reasoned feedback
• A fiduciary can create a partnership with you that allows you to feel confident, and offers important tools and resources
• You can gain confidence in knowing that the advisor is specifically educated in the areas that are important to your financial future

The right fiduciary will prioritize organization, offer accountability and objectivity. They will be proactive to ensure you are aware of movements in markets, changes in your investments and strive to be aware of your needs. They will help to educate you as you progress in your journey, and they will hold themselves to a high professional standard to ensure they are educated on products, services and important aspects of the different investments and ancillary legalities and best practices.

A fiduciary can help create a trusted partnership, which helps you navigate the markets and inspires success and confidence throughout your changing financial needs over the years.

How a Financial Advisor at Grinnell Wealth Management can help you achieve financial goals

Grinnell Wealth Management has qualified fiduciaries as financial advisors. We want to work with you to meet your financial goals and help you prepare for current and future financial needs. From educational planning, to business building, to investments and retirement planning, we offer financial products that can help you achieve these goals.

But products aren’t the only necessary variable – a financial professional, and the relationship that can be built with such a professional, can be important to your overall success. Grinnell Wealth Management employs advisors that are very good at building relationships, offering solid guidance, and who take their client’s financial goals seriously.

We invite you to view our offerings online and reach out to an advisor today to see what’s possible.

Security services offered Registered Representatives of Cambridge Investment Research, Inc., a Broker/Dealer, member FINRA/SIPC. Advisory services offered through Cambridge Investment Research Advisors, a Registered Investment Advisor. Grinnell State Bank d/b/a Grinnell Investor Center d/b/a Grinnell Wealth Management and Cambridge are not affiliated.