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Small business owners tackle a number of financial and legal issues on a regular basis, including business modeling, workforce management, and client acquisitions. Start-ups and fast-paced companies take on even greater hurdles. This is where a financial adviser becomes indispensable. Whether they are helping plan a new business or manage an existing one, a financial adviser is trained and experienced in making critical operational decisions and business strategies.
Look For Qualifications
Anyone can hand you a business card stating they’re a qualified financial planner or private wealth manager. This does not mean you should take their word for it and start working with that person. Always screen prospects by asking their qualifications. Do they have certification? Check official registries of professional organizations, like the National Association of Personal Financial Advisers or the Garrett Planning Network.
Know What You Need
Some financial advisers specialize in a certain service like retirement or estate planning. You should know what you need before even approaching one. Once you know what you need, it will be easier to find a financial adviser that complements your situation. Lack of mutual understanding can lead to flawed advice and erroneous planning.
Understand The Costs
Find out how much your adviser charges before locking in their services. Some advisers implement a fee-only model because they do not receive compensation for any of the products they sell. On the other hand, commission-based financial advisers may not charge clients for office consultations, yet they receive compensation from the products they sell. Some financial planners implement a hybrid fee model wherein fee-based advisers still receive compensation for some of the products they sell.
What You Shouldn’t Do
Looking for a financial adviser can be very stressful; hence the tendency of people to “jump the gun” without knowing the financial adviser enough to make an informed decision. Take the time to look for the right financial adviser.
Don’t get easily persuaded by performance. Fancy presentations and sophisticated charts may make an investment product look promising, while in reality it may have actually under-performed. The same goes for your financial adviser. They may look professional, with an upscale office and personal assistant, but if they do not have the brainpower or experience to guide your small business, the accessories will be absolutely useless.
A good starting point for finding qualified financial advisers is through SCORE, a non-profit organization whose mission is to educate entrepreneurs in building, growing, and succeeding in their small businesses.
Informational Credit to PenFinancial Credit Union
Emma Sturgis is a freelance writer living in Boston. She writes on a variety of things, most often real estate and education. When not writing, she enjoys reading, rock climbing, and film noir. Twitter: @emmasturgis2
