How to Find the Right Financial Services Company

10 MIN
Date Published
March 9, 2021

It’s easy to feel like there aren’t enough hours in the day to simply make the money you need to thrive—how could there be enough hours on top of that to efficiently manage and deploy that money? 

Between complex tax or legal policies, investment planning, and saving for the future, it can be overwhelming or even downright unfeasible to make financial decisions when it’s not your area of expertise.

That’s why many individuals and businesses turn to financial services companies to take charge of their funds. By leaving those tasks to the pros, you’ll have more time to focus on doing what you love to make sure the money keeps coming in. 

If you’ve got questions about how you could benefit from a financial advisor or don’t know how to find the financial services company that fits your needs, keep reading for answers.

What do financial services companies do?

Financial services companies provide clients with a wide range of services including financial planning, investment advising, and retirement saving. 

Financial services companies understand the complex legal and tax rules that apply to different types of investments and money moves, and can advise about the smartest ways to spend and save money. They may also have vast knowledge of the kind of markets that are booming or floundering, in order to help their clients make wise financial moves.

The decision about what to do with the funds ultimately lies with the client, but the financial services company can provide intelligent recommendations that bring the most short and long term benefits to the client.

What’s the difference between financial services companies vs. freelance financial advisors?

Freelance financial advisors and financial services companies generally provide many of the same services, but a freelancer usually does so without the backing of a financial institution. 

This lack of institutional backing can be both an advantage or a disadvantage, depending on what a client is looking for. If financial services companies are employed by larger banks or investment firms, they may feel pressured to give advice that aligns with their company’s goals, while a freelancer could have more freedom to go rogue with recommendations that could be out-of-the-box, or high risk, high reward. 

Some clients want the dependability and history of a firm with a rich history; they like knowing their investments are backed by a trusted institution. 

Others want a more flexible or casual relationship with their financial planner, one they can get from a freelancer. They might meet for coffee or a drink (once it’s safe) rather than in a big office building, or they might find a highly specialized freelancer who can provide personalized advice tailored to their needs.

Do I need a financial advisor?

If you have to ask yourself this question, the answer might be yes. Keep in mind that financial advisors can provide different levels of support and services—maybe you have someone you only call when you have a question about your retirement fund, or only with specific questions about taxes on your small business.

The more complex your financial situation gets, the better it is to turn to a financial services company for some type of support. For instance, if you’re running a business, managing multiple income streams, planning for an uncertain future, or dealing with an unexpected influx of cash, you’ll likely find it financially beneficial to receive planning and investment advice from a pro.

A lot of people like to think they can manage their money on their own, and many can. But even if you have an interest in finance and want to have a go at managing it yourself, remember that financial advisors can enhance your own financial curiosity and decisions rather than take away your ability to make them. 

With your finger on the pulse of the financial sector, you’ll be better equipped to ask complex questions of your advisor, suss out rewarding investment opportunities, and get a second opinion on potentially risky maneuvers, all while having someone handle the nitty-gritty of those decisions while you can focus on bringing in more money.

How much money do I need to hire a financial advisor?

There’s no one set income you need in order to hire a financial advisor. Traditionally, though, many financial service companies, especially those specializing in wealth planning and investment advisory services, require a minimum investment to be able to work with them and then charge around a 1% fee on your assets to manage your money. 

While those minimums do vary depending on the advisor and the institution, it’s not unusual for those minimums to be $100,000 or higher.

On a smaller scale, many advisors charge an hourly fee of at least $100 for their services, meaning that upfront cost might not be worth it if their advice about your modest income or investments only saves or gains you a few hundred dollars. 

Still, with the growth of the financial industry and the gig economy, many freelance financial advisors and fintech startups are paving the way to provide financial advice and investment planning even for people with leaner incomes. Some set no minimums to work with them, or even specialize in helping people with small incomes maximize what they do have to gain more in the future. 

In short, if you’re serious about gaining the benefits of a financial planner, you can find a licensed and qualified one to work within your budget.

What are the different types of financial advisors?

Financial advisors provide a wide variety of services, including: 

  • Financial planning services: A financial planner will look at all the areas of your life and ask you about your financial goals in the short and long term. They’ll come up with a plan that helps you accomplish those goals, whether it’s finding new income streams, saving more in order to purchase an asset down the line, increasing your philanthropic giving, starting a trust or college fund, or maximizing your tax deductions. 
  • Investment advisory services: Investment advisors are also sometimes referred to as stock brokers, and they specialize in making recommendations about investments like buying stocks and bonds. They’ll ask questions about what you want to gain from your investments (for instance, whether you need cash quickly or want these investments to pay out 30 years from now), whether you’re risk-averse, or if there are any markets you have a particular interest in pursuing. Based on your needs, they’ll provide recommendations for investments that meet your goals.
  • Retirement income planning: These advisors specialize in planning and saving for the future. They may help you set up funds like IRAs, advise you on the best time to retire or take your Social Security benefits, figure out how you can grow your money in tax-advantageous ways, and ultimately build the financial cushion you’ll need to enjoy your golden years.

How do I find a financial advisor?

By clearly defining the type of financial planning you’re looking for, you can find the financial advisor that fits your specific needs. Even if you don’t know what companies are in the financial field, you can still find firms that offer the services you’re looking for. Here are a few places to look first for the best financial advisors:

  • Vanguard: Vanguard is backed by an institution, but prioritizes providing personalized advice for a wide range of income levels or financial goals. Fees can remain relatively low, and anyone with even small investments can get access to advisors. 
  • FPA Planner Search: This site allows you to search by specific need or location to find a financial planner who can provide you with the personalized or specialized advice you need. 
  • Betterment: Especially catered to people with modest incomes, Betterment wants to help everyone invest and save better.
  • Brightscope: If you’re looking for a comprehensive look at creating or building your 401(k), Brightscope has developed a detailed analysis system that rates big 401(k) plans and provides more transparency for frustrated customers.

What questions can I ask financial advisors to spot frauds?

Like any industry, finance has its frauds. As you’re narrowing down your choices, don’t be afraid to ask these questions that will make sure you’re dealing with a trusted, qualified professional:

  • What services do you provide? The financial industry is incredibly broad, and not every advisor does everything. Get an idea for their area of expertise, making sure that it aligns with your current needs and future goals.
  • What type of clients do you typically work with? Generally, you’ll want to find an advisor who works with clients in similar income brackets or with similar needs to yourself to yourself. Not only will they have better knowledge of the plans and investments that are best for you; they also won’t prioritize far wealthier clients and leave you on the backburner. This is also important if you have very specific needs. For instance, if you’re launching a small business and want to maximize your tax deductions or get advice on scaling, you may want to look for a planner that specializes in advising small business owners.
  • How will we communicate with each other, and how often? Every advisor has different modes of communication. If you get a hot stock tip from a friend, will you be able to text your broker to facilitate a fast buy? Are they open to weekly phone calls updating you on the state of your funds? Decide what you want from your planner, and ask if that’s a communication style they can make happen.
  • Are you a fiduciary? Many financial advisors are fiduciaries, meaning that they’re legally obligated to act in your best interest. They usually make money by taking a cut of the assets they manage, which means they’re also financially motivated to give you only the most solid advice. Stock brokers, on the other hand, are paid by commission by a sale of stocks. They may still provide great financial advice, but they’re not fiduciaries, so they aren’t legally obliged to present you with the options that make the most sense for you. They may have more conflicts of interests when they’re encouraging you to buy or sell certain stocks.
  • How are you compensated? How much will I be charged for your services? This is especially relevant when it comes to brokers and traders. You generally want to know that a financial planner is making money from the assets they manage, rather than getting commissions from trades, raking in high fees from mutual funds, or earning bonuses by trading their company’s proprietary investment products. The more income they get from outside services, the higher the chance they may present you with advice that’s in their best interest rather than yours. You also want to know the percentage they’ll take off the assets they manage for you. Be prepared for it to be around 1%. However, some newer startups or freelancers have lower or even zero fees but charge an hourly rate for their advice.
  • How can you help me reach my goals? This is a great question to ask in order to weed out planners who aren’t really listening to you. Each client has individual needs, goals, and financial responsibilities, and you need an advisor who will take those into account while setting a realistic plan for achieving your short and long term goals.

If you find any of their answers to be unsatisfactory, trust your gut and move on to another candidate. For more reassurance, make sure to verify their credentials via organizations like the Financial Industry Regulatory Authority, the Security and Exchange Commission (SEC), the CFP Board, or anywhere else they may be registered with.

You can also ask for references, or search for online reviews of their services. Remember that your money and future is on the line, so you must feel completely confident with your decision. 

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