How to Choose a Financial Advisor in Chester County

May 1, 2021

couple choosing a financial advisor

Money management is a skill that comes with a certain level of difficulty. As adults age and accumulate wealth, choosing a financial advisor can be an ideal move that can build a stable future for retirement. Here are a few tips on how to choose a financial advisor in Chester County or close to your own place of residence.

Financial Advisors 101

A financial advisor, or wealth manager, is a professional who manages the wealth and assets of their clients. They also offer guidance to their clients on what investments will help them achieve their long-term goals. Whether their clients have a small nest egg they’re trying to grow or millions in the bank, financial advisors work with their clients to reach success for their specific goals.

A key part of choosing an advisor is establishing a relationship based on a high level of trust. Building this trust can be easier if you are aiming for long-term investing and remunerating your advisor on a retainer fee basis. Understanding the available options will help you make the decision that’s right for your personal situation.

In and around Phoenixville and Chester County here in PA, there are a variety of financial advisors to choose from. Doing a little homework before deciding on an advisor is always a good starting point. Just like with a significant other, it’s vital that the advisor chosen is a good fit for the individual and their family.

How Financial Planning Works

Traditionally, many financial advisors are paid a commission based on a percentage of the assets they manage. More recently, however, this “assets under management” (AUM) model has lost some of its popularity. In its place, financial advisory firms including Creative Capital Wealth Management Group are offering their services based on fixed retainer fees. 

So what’s the difference? The traditional AUM model allows advisors to earn varying commissions based on the services they sell. So while they may be offering sound advice to their clients, it is ultimately driven by their own specific interests and opportunity for advancement. How much the financial advisor is paid depends on the complexity of the portfolio. As a client’s investments grow, fees may be adjusted. 

Retainer fee-based advisors differ largely on the fact that they charge a set amount no matter the size of the portfolios they manage. Charged monthly, quarterly, or annually, retainer fee-based financial advisors have the potential to offer investors better, more transparent guidance. Shifts in policy have also supported this change to fee-based advisors, and it’s no surprise since clients want to maximize their savings in an unstable climate.

wealth-management

Retainer Fee-Based Advisors in Phoenixville

While retainer fee-based advice does not guarantee a predefined outcome, it gives advisors the freedom to work with nothing other than the client’s best interests in mind. The fee ensures a level of commitment from the financial advisory team and allows them to work independently as opposed to being tied to specific investment products. 

Many financial advisors, like the ones here at Creative Capital Wealth Management Group, do not require full management of assets. That means clients are able to receive advice while keeping their assets where they’re best suited. That’s a huge plus for growing long-term wealth.  

Commission-based remuneration, on the other hand, encourages financial advisors to sell products that pay the highest commission. These may include stocks, shares, mutual funds, or insurance. Of course, a professional advisor will have your interests in mind, but they may not always be able to avoid a conflict between what is best for the client and which product pays the highest commission to them. 

Retainer-based financial advisors are less limited in their choice of what they recommend. They can make recommendations based purely on client satisfaction and specific goals they want to reach. It is not uncommon for clients of Creative Capital Wealth Management Group to have their assets managed elsewhere. In some cases, it’s highly recommended. 

Financial Planning At Any Age

Access to regular, consistent financial advice is another benefit of retaining a financial advisor. Most people, whether they are high net-worth investors, retirees, or professionals just starting their career, adjust their financial planning and preparations several times during their adult life. 

Depending on the stage of life you are in, you may not yet be ready to make large investments, but don’t let that deter you from finding a financial advisor. Traditional commission-based models often stipulate a minimum asset level, which can put them out of reach, but retainer fee-based advisors will be able to offer advice to any level of client. 

While many people in their 30s are focused on raising a family and taking care of student debt rather than investment advice, they can benefit from a review of existing debts and a potential restructure of those. Financial planning advice helps them prepare for a financially secure future.  

Under commission-based models, financial planning and investment advice are hard to combine. Retainers allow financial advisors to spend time reviewing your specific situation. Based on this, professionals can offer advice that reaches beyond investment products. 

Long-Term Relationships That Build Trust

Financial planning is never a one-and-done event. It’s a process, and it should grow with the natural changes that occur in one’s life. Priorities will shift over time, and it’s perfectly normal that the ability to save and invest will differ throughout the years.

Raising a family, for example, changes your priorities. Starting your own business may mean your focus will shift. Having established trust and a clear financial strategy with a financial advisor helps keep you on track. You may need to adjust to unexpected life changes, but having a solid relationship with a trusted advisor will help you not lose sight of your long-term financial goals. 

At Creative Capital Wealth Management Group, our advisors have looked after some of our clients for over two decades. While each client’s financial situation is different, one thing is for sure—circumstances change over time, so find an advisor that will work for you.

Retaining a financial advisor in Chester County not only means fast access to professional advice but also having a team to advise you and that understands your personal situation. Our financial advisors develop a profile combining your past and current financial situation as well as future goals. We identify not only the most suitable financial products for you but also map out a long-term strategy. 

Most investors build their assets gradually. Without a solid strategy and a well-defined goal, they are likely to miss out on opportunities. On the other hand, building good investment habits early can earn you millions over the years. Retaining a financial advisor means that you have a professional in charge of staying on track when it comes to building your financial future.

The Impact of Tax Laws and Regulations on Investments

Just as an individual’s circumstances change, a country’s economic and political framework is also likely to change over time. Updates to tax laws and regulations may influence investment choices. 

In recent years, the Department of Labor introduced a fiduciary rule for retirement advisors. Under the rule, advisors must act in their client’s best interest as opposed to “only” recommending suitable investments. Put simply, financial advisors have a higher level of responsibility. 

In the past, unless a client specifically asked, advisors were not obligated to disclose all information relevant to a client’s financial planning needs. And for commission-based advisors, they often place their emphasis on what can benefit their pockets as well as their client’s which isn’t always the best for the client in every circumstance. 

Retainer fee-based financial advisory firms are better placed to fulfill this requirement. Their business model is built on offering the best advice for their client rather than selling specific products. 

Other changes may affect the places and products you choose to invest your money in. Staying informed about impending changes to laws and regulations can be tricky when you lead a busy life. For a financial advisor, keeping an ear to the ground is part of their daily work. By retaining a trusted advisor, you are automatically kept up to date. 

Other Changes That Affect Investing

financial-advisor-chester-county

Laws and regulations are not the only things changing when it comes to investment decisions. Technology is another key influence on financial products, and automation is trending to grow in importance. However, technology is at its best when combined with human experience and advice which makes finding an informed financial advisor a clear choice.

With numerous changes happening to tax laws, regulations, and technology in today’s society,  wealth management, and financial planning are being impacted much more than in recent years. Now is the time to reconsider what type of financial planning is a good fit and possibly make changes to current strategies. Look for advantages in the changing market, and make decisions to grow future capital with your own goals in the forefront. 

Choosing a Financial Advisor in Chester County

All things considered, paying for financial advice is just as much part of your financial planning strategy as the products you choose to invest in. Therefore, getting high-quality advice at a justifiable rate is one part of this strategy. Choosing a financial advisor in Chester County may feel overwhelming at first, but there are great options out there if you know where to look.

Retainer fees for financial advisors are less dependent on the value of your portfolio. Instead, charges are based on the complexity of the assets and your situation. In many cases, this means you pay less and receive more thorough advice from your financial advisor. The benefits of retaining a financial advisor for their knowledge and independent expertise are a clear-cut choice and far outweigh those offered by commission-based advisors.

Whether you’re looking for a financial advisor in Chester County, Phoenixville, or beyond, the experts at Creative Capital Wealth Management Group can meet with you, virtually or in person. Not sure where to start? Schedule a call today with one of our financial planning experts.

Top 12 benefits of Retainer-Based Planning.

There are several differences between standard fee-based advisors and retainer-based clients, some that people don’t even think about. Check out the top 12 benefits of retainer-based planning!

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