Misconceptions about Financial Advice
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Having proper financial advice can change a person’s life, but?many people don’t know what advisors ACTUALLY do or how much they cost. And there’s millions of people who think they can’t afford to work with an advisor, so they end up going at it alone.
You no longer have to go at it alone, despite not being in the top 1%. Let’s break down some of the wealth management barriers for you.?NOTE: Our team at AdvisorFinder does not advise clients, but rather we help people find financial advisors. Some of the most common misconceptions we’ve heard from our users who are searching for advisors:
“Financial advisors are too expensive”
Many people think financial advice is only for the top 1%. It’s not.
Nowadays, there are plenty of advisors who work with clients for the cost of a monthly gym membership or an annual flat fee. Some advisors work with clients on an advice-only basis, which means they don’t offer ongoing investment management, which can save clients money if the client wants to do the investing themselves. In return, an advice-only advisor will help their clients develop a plan for a flat dollar amount. As you can see, there are many different pricing models that are more attractive to some clients that want lower-cost options without sacrificing the level of advice they receive. The new kid on the block is the subscription-model. The model is great for younger professionals who want the advice of an advisor, without the commitment of paying a traditional AUM fee. Also, many advisors work with clients who have <$50k in assets. There are options for anyone!
In most cases, financial advisors charge a 1% fee of your total account. This is called an AUM fee, a percentage of the Assets Under Management.
As you can tell, there are ample options for your unique situation. Also, it’s not always about where you currently are, but more about where you want to be in the future. Your advisor can help you plan for your future, so you can sleep better at night without thinking about financial stress.
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“I thought I had to move over all my money?”
You can move as much or as little as you want.?In some cases, you don’t have to move over any of your money, but this depends on the type of advisor you work with. You and your advisor should assess your current situation and determine what the best plan of action is for you. When you decide to work with an advisor, you don’t have to move all your money over at once! Additionally, working with a financial advisor isn’t only about investing your money. A financial advisor will likely look at opportunities to help you with the following:
Many people look at financial advisors and just think about the stock market and how a financial advisor can help them invest their money. However, looking at the list above, you should feel confident that advisors go far beyond investments. Your financial advisor should look at both sides of the balance sheet and help you feel less financially stressed.
“I’ll start working with an advisor in my 30s”
We’ve heard this repeatedly, but it’s a common misconception many people have. There is no “right” age to begin working with an advisor, but starting in your late-twenties and early in your career can be a great time to get started with a financial advisor. The latter is especially true if you’re looking to settle down, thinking about marriage or kids in the next few years, working a high-paying job, or have financial stress from everyday life. Life itself can get in the way of your goals. Managing your finances can be stressful, especially when you have a full-time job or if you don’t feel confident about planning for your and your family’s financial future. Planning ahead will help you prepare for life’s greatest moments and challenges, which is where a financial advisor can help.
People don’t plan to fail, but fail to plan. We’ve heard over and over, “I’m too young to work with an advisor” or “I’ll wait until I settle down,” but financial advice can be invaluable.
By responding to some of the most common misconceptions people have about financial advisors, we can help people feel more financially secure knowing that they have access to financial advisors who are there for them. The team at AdvisorFinder believes it’s crucial to address these misconceptions about financial advisors in order to help people reduce the stress and anxiety they have in life which stems from their financial situation.