5 Mistakes You’ll Want to Avoid When Working with a Financial Advisor

5 Mistakes You’ll Want to Avoid When Working with a Financial Advisor

As you consider your economic needs for the future, meeting with a financial advisor can be an appropriate way to manage risk and better position yourself to achieve your financial goals. Prosper Financial’s dedicated team has decades of combined experience to help you address your goals for financial security. 

When selecting and working with a financial advisor, there are a few important factors to consider so that you can know that you are getting appropriate help for your current situation. Additionally, avoiding certain mistakes will help you as you learn to work with your advisor to develop long-term strategies for your financial future. 

1. Not Considering Goals Ahead of Time

A traditional financial advisor may be able to help with a variety of tasks, but you’ll want to consider your scenario before deciding who to consult. An advisor is a broad term that encompasses many types of professionals that help manage your money, from buying and selling stocks to developing a retirement plan based on your unique needs. Choosing someone whose specialty is geared towards your needs can be a sound way to address your goals when working with a financial advisor. 

2. Not Taking the Time to Find the Advisor For You

U.S. News and World Report recommends interviewing more than one advisor to see whether their investment style matches your goals and preferences. “By interviewing multiple advisors, you are more likely to identify which traits are most important to you in an advisor,” the article reads. 

At Prosper Financial, our team of professionals is happy to work closely with you to identify your current and future needs and develop a plan that’s suitable for your unique situation. 

3. Setting Unrealistic Expectations

According to an article from Forbes, it’s important to have realistic expectations about the performance of your investments. Advisors who promise specific returns on investment may not be behaving entirely honest with you, and may be advertising metrics that simply aren’t likely or feasible to meet. There are only a handful of investments that can guarantee specific performance. For instance, a Certificate of Deposit (CD) is an account that holds your money for a fixed period and pays interest at the end of that term. 

4. Not Vetting Your Advisor

It’s also recommended that you vet an advisor before agreeing to work with them. Most importantly, you’ll want to verify that the credentials they say they have are accurate. 

Depending on the type of advisor you’re seeing, there are many different credentials they might hold. For instance, a Certified Financial Planner (a type of advisor) must complete specific coursework and pass an exam in order to receive their certification. 

The Financial Industry Regulatory Authority’s (FINRA) BrokerCheck tool is one way to verify your advisor’s certifications and check for any complaints filed against them. 

5. Neglecting the Whole Picture

When finding a financial advisor, you’ll likely want to look at the whole of your finances–not just specific investments. A financial planner can help you consider the whole picture as you develop a plan that works towards your goals. 

Financial Help from Prosper Financial

Whether you’re looking to prepare for retirement or manage existing wealth, our team at Prosper Financial can help. To learn more and schedule a consultation, contact us today.