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What Type of Financial Advisor Do You Really Need?

There are several types of financial advisors out there, each with varying credentials, specialties, and degrees of accountability. And when you’re on the hunt for a professional suited to your needs, it’s not uncommon to ask, “How do I know which financial advisor is best for me?”

The answer starts with an honest accounting of your needs – and a little bit of research.



What is a Financial Advisor?

Typically, when you talk about hiring a financial advisor, you mean a professional with the knowledge and experience to guide your financial planning, investment strategies, and tax consequences.

But advisors aren’t one-size-fits-all. In fact, the term “financial advisor” is a bit vague, as the title isn’t tied to a degree or set of credentials. And because there’s no set standard for who can and can’t designate themselves a financial advisor, not all professionals are made equal – or are even qualified to handle your affairs. In fact, you may even be presented with many different titles for a Financial Advisor and find it difficult to determine who has your best interests at heart.

That’s why it’s essential to research prospective advisors and understand their qualifications before you hand over your money.


Types of Financial Advisors to Consider

Depending on your financial needs, you may opt for a generalized or specialized financial advisor. Knowing your options is the first step. As you begin to dive into the world of seeking out a financial advisor that fits your needs, you will likely be presented with many titles leaving you wondering if you are contacting the right person. Below are the types of financial advisors you should consider to ensure your money and goals are in good hands.


Financial Planners

Financial planners approach your monetary health from the top-down. These advisors most often offer services that do not require Federal regulation, such as budgeting, saving, and retirement planning. When seeking out a trusted professional, it is best to hire a CFP® or a CERTIFIED FINANCIAL PLANNER. These advisors have cleared the educational, certification, and legal hurdles necessary to register with the CFP® Board. Additionally, they’re code of ethics requires them to act as fiduciaries, which means they must serve your interests – not their pocketbooks. It is important to note that some financial advisors also have broker licenses (meaning they can sell securities), but they are not solely brokers. On the same note, brokers are not all licensed equally and are not financial advisors. This is just one of the many reasons it is best to start with a qualified financial planner who can advise you on your investments and retirement.


Wealth Managers

In your search, you will certainly see the term ‘wealth managers.’ Wealth managers are financial planners that offer a broad range of services geared toward high-net-worth clientele. In addition to retirement and investment management, they may also provide estate planning, philanthropic activity, and tax-related services. A wealth manager may put you in touch with a more specific type of advisor depending on your current life situation such as a Certified Divorce Financial Analyst (CDFA®) or a Certified Public Accountant (CPA) to provide expertise during tax time.

That said, “wealth manager” is another catch-all term that anyone may adopt. As such, you should ensure the legitimacy of your wealth manager by selecting one with credentials such as a CFP®, or fiduciary status.


How Do I Know Which Financial Advisor is Best for Me?

Once you know the types of advisors available to you, you can start a more targeted search. But before you decide who’s the best financial advisor in Wilmington, Delaware, you should also consider criteria like:


1. Fiduciary Status

Some advisors, such as CFPs and CDFAs have a fiduciary duty to their clients. If you want to ensure your money will be properly managed, opting for a professional with an obligation to protect your interests is a great place to start.


2. Certifications and Registrations

Not every financial planner maintains a professional designation. To receive the most comprehensive services, it’s often best to go with a credentialed professional, such as a CERTIFIED FINANCIAL PLANNER.

3. Fee Schedules

When you hire a financial advisor, you’ll most likely encounter one of three fee structures:

        • Fee-only advisors charge a flat rate, hourly rate, or AUM fee for their services

        • Fee-based advisors charge flat, hourly, or AUM fees, and may collect other fees like:
            • Commissions from clients for making investments or opening financial accounts

            • Trading fees for buying and selling securities

            • Third-party commissions for promoting financial products

        • Commission-based advisors make their commission recommending and selling third-party financial products.

While each fee schedule has its pros and cons, for many clients, a fee-only fiduciary means increased transparency and an advisor who acts in your best interest.

4.Your Situation

Everyone’s financial needs are different, and the type of financial advisor you need may depend on factors like your:

        • Net worth
        • Career, homeownership, and retirement goals
        • Investment plans
        • Complex life situations, such as family planning or divorce

And it’s not just about who you need – some advisors cater only to individuals above a set net worth or with specific life goals. Starting with an advisor with a professional credential such as CFP® will get you started on the path to success leaving you feeling fully informed and comfortable about your financial plan.


Are You Looking For The Best Financial Advisor In Wilmington, Delaware?


If you’re in the market for a CERTIFIED FINANCIAL PLANNER in Wilmington, Delaware, Clariti is here to serve you. Because we’re fee-only, AUM-based fiduciaries, we’re legally obligated to put your interests before ours – always. And with our dedication to transparency, you’ll always know how much you’re paying and what you are paying for. We genuinely believe we can help you build wealth on your terms and look forward to the opportunity to do act as your financial fiduciary.

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