Industry Insights

The 3 Essential Qualifications of a Financial Advisor

Financial advisor

Congratulations, you’ve decided to work with a professional to manage your assets! You start your search for local financial advisors, but you see a confusing array of qualifications such as IAR, PFS, RIA, IA, CFS, and CFP™. Which credentials guarantee the competence of a financial advisor?

Doctors, lawyers, teachers, and many other professionals cannot work without standardized credentials that demonstrate their education and practical experience. However, anyone can take the title “financial planner” or “financial advisor.” In this post we’ll discuss the value of working with a Certified Financial Planner™ (CFP) so you can be assured that your assets are in the hands of someone with the ethics, education, and experience to serve you well. Besides the CFP™ certification, we believe there are two other essential qualities you should look for in your financial advisor.

What to Look for in a Financial Advisor

Successful investing requires the guidance of a highly-qualified financial advisor. A few clients might achieve short-term gains playing the stock market or day trading cryptocurrency, but there are legions of costly mistakes on that path. All of our clients recognize the value of long-term stability for their retirement plans and other investments. When you are evaluating potential financial advisors, look for the following 3 qualifications:

  1. Certified Financial Planner™ (CFP) credentials. Above all other credentials, the CFP™ demonstrates the successful completion of rigorous requirements and adherence to strict ethical standards. The CFP™ professional has completed several years of academic study, garnered significant experience managing client finances, and she/he has passed a comprehensive certification exam. Other credentials such as a chartered financial analyst (CFA) designate specialization in certain fields, but the CFP™ credentials stand-alone as an industry standard demonstrating a high degree of academic study, professional education, ethics, and experience.
  2. Someone who will educate you without selling. Choose someone who can educate you on essential concepts and strategies for your investments without trying to sell you products that may not be prudent for you. When you meet a potential advisor, look for someone who speaks without jargon or a sea of confusing acronyms. For example, your advisor should have a succinct, easy-to-follow explanation for the pros and cons of choosing a Roth IRA vs. a traditional IRA.
  3. Someone who understands you. Satisfied clients work with a financial advisor for many years or decades. Look for someone who demonstrates that they understand your unique financial situation, who has a record of client retention and satisfaction, and who prioritizes a long-term relationship with you. This advisor will respect your assets and adapt appropriate investment strategies as your finances grow over the years.

If you have any other questions on your path to choosing the best financial advisor to manage your assets, please reach out to us anytime. You can send us a message on our website or give us a call at 541-770-1311.

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