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The Role of a Financial Advisor and How to Choose One
Posted: Nov 21, 2023
The Role of a Financial Advisor and How to Choose One image

HealthTree's financial program manager Diahanna Vallentine shares with us helpful insights about financial advisors for cancer patients. 

The Role of a Financial Advisor and How to Choose One

For those of you who tune into my webinars and read my articles, you will know that I’m constantly recommending that you speak to a financial advisor. I have been a registered advisor for more than 22 years and have never had a client who didn’t benefit from my services. And, I’m always surprised that many people think you must have a lot of money to work with an advisor. That is not true. I would argue that if you don’t have a lot of funds, an advisor can help you manage the money you have in ways that you never thought possible. 

What I know is we all have needs, hopes, and dreams. And if we just think of them and try to keep them in our thoughts, they all remain dreams. When you put things in writing, and your goals are aligned with your timeframe, you know a dollar amount associated with those dreams or goals, then finding the road map to get there, which is hugely also based on your investment risk tolerance, is the hard part.

That is where a financial advisor comes in. They look at your entire financial picture and ask hard, pertinent questions about your dreams, needs, and where you are today financially. They will uncover your strengths and weaknesses and create a roadmap to help you overcome those weaknesses and help you achieve your short and long-term goals. 

The term financial advisor covers many different positions. However, for our purposes, it’s meant to include fiduciary, registered, licensed representatives, and more credentialed certified financial advisors. They may have many initials after their names as well. As with any professional handling your more personal information, you should always do your due diligence, interview prospective advisors, and research their employment history (using a site like Broker Check). You need to work with someone whose investment philosophy aligns with your own and who, as a fiduciary, always puts your best interest above their own. 

Research suggests that the benefits of working with an advisor include less stress. You don’t have to go it alone. And you don’t have to toss a coin to make financial decisions, wishing for the best outcome. Also, working with an advisor could help you accrue 15% more money to spend in retirement.

Here is a staggering statistic. The average age of widowhood in the U.S. is 59. An age before Social Security starts and for those on the younger spectrum of the average, long before access to retirement funds are available. So, for those of us who find ourselves leaving the workforce early to care for a loved one, it also hurts the ability to continue saving for retirement. Add in the ever-increasing cost of healthcare in treatment and insurance and the inflation of goods and services, and you can see where this is heading. The need to properly manage all aspects of your financial life is now apparent. There is no redo; you need to have all of your ducks in a row to be financially solvent for the rest of your lives. 

Types of Financial Advisors:

Robo Advisors: These are digital services offering simplified, low-cost investment management. You answer questions online, and an algorithm will build you an investment portfolio. There are usually no account minimums and you do not meet with a live person.

Online financial planning services and advisors: These online financial planning services are more costly than Robo advisors, but you can speak with a live person. Many can also create a holistic financial plan. Additionally, you can be assigned to meet with a credentialed certified financial advisor. They will vet the advisor for you. Unfortunately, you won't be able to meet in person. They may or may not have account minimums. They may be paid by commission and through planning fees.

Traditional financial advisors: These advisors can meet with you in person. They have more personalized services and can help with all of your financial needs. They have a variety of fee structures. They are the most costly to hire but offer specialized services and what is needed for complex situations. They generally also require a higher minimum balance to manage. They may or may not be fee-based. Advisors manage assets and offer comprehensive financial planning. Many of these advisors also have advanced credentialing such as certified financial planner (CFP) designation.

How do you Find a Financial Advisor?

First, you must ask yourself, “What type of help am I looking for?” and then find the advisor for your needs.

Some of the topics of financial planning include:

  • Taxes
  • Retirement Planning
  • Risk Planning
  • Education/College Planning
  • Asset Management
  • Budgeting
  • Estate Planning

A good financial advisor will also offer emotional support and perspective during volatile economic times.

Just so you know, complete planning will always take your needs, goals, risk tolerance, time frame, your best interest into consideration, always before making recommendations. Ensure the financial advisor you choose offers the services you want in your financial and non-financial lives.

Ask friends or colleagues if they use one, and if so, how happy they are with their services. CAUTION: Remember Bernie Madoff; he swindled friends and family with promises of high returns. So don’t just rely on your friends; you are responsible for your advisor selection. If something like high returns sounds too good to be true..RUN! Here are a few helpful websites to assist you in your search.  

Here are some questions to ask your prospective financial advisor:

  1. Are you a fiduciary?
  2. How do you charge for your services
  3. What are my all-in costs?
  4. What are your qualifications?
  5. How will we be communicating?
  6. What is your investment philosophy?
  7. What assets will you use?
  8. What investment benchmarks do you use?
  9. Who is your custodian?
  10. How will your investment affect your taxes?

The advisor you choose should be willing to work with your other advisors, such as an estate attorney, CPA and insurance professional. This is very much a team effort.

I often hammer the need and benefits of working with a financial advisor because they are invaluable. Most will offer you a free meeting to get an idea of your needs and see if they can assist you with those needs. The questions I mentioned earlier are for this initial meeting. Remember, the primary purpose of a Financial Advisor is to professionally manage your financial life, get and keep you on track so that you reach your financial goals. They take on the worry so you can live your best life.

Diahanna is the financial program manager with the HealthTree Foundation.  She leads a team of HealthTree Coaches who have in-depth training with financial resources.  HealthTree Coaches are volunteer blood cancer patients or caregivers willing to share their personal experience and knowledge of resources with others. 

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The author Diahanna Vallentine

about the author
Diahanna Vallentine

Diahanna is a HealthTree Coach specializing in financial help for blood cancer patients. As a professional financial consultant and former caregiver of her husband who was diagnosed with multiple myeloma, Diahanna perfectly understands the financial issues facing blood cancer patients.