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How to Choose a Financial Advisor

August 30, 2021

Choosing a financial advisor is an important life choice that has wide-reaching ramifications. Here are a few tips to help you choose the right advisor:

Full Transcript:

Now that you are looking for a financial advisor, here are some ways to help differentiate the many different advisors that are out there. I would start first with deciding what you're really looking for between a personal advisor and an institutional advisor. The differences pretty much come down to the size of the firm. An institutional advisor would be with a larger firm. They've got a large pool of people behind them doing research that you may not have that advisor for life, because the firm would own the client relationship and could change who is your advisor at any time. So although they offer some advantages to the research, they offer some major disadvantages to the personal side of things. So we at Pathway Financial Group are part of an independent firm. So we are a smaller firm, and we personally own the client relationship so that we are together and we can work through things throughout your life

You're not going to be traded off to another advisor at some point. Another thing that we want to make sure you understand is there is a major difference between fee structure between advisors and firms, and that debate continues to rage throughout the industry right now. You have on one side fee-based advisors, fee-only advisors, and they will give you all the reasons why they only charge you a fee for what they do. On the other side, you have commission-based advisors, and they will give you the reasons why they just charge a commission on what you buy, as opposed to a fee. We at Pathway Financial Group have advisors that are actually licensed to do both, so we always want to have that conversation with you. What are you really looking for, and what's a better fit for you?

In some cases, the fee advisory solution is better, and in some cases, the commission-only solution is better. So we want to make sure we talk through that with you and help you figure out which way you want to go. Another big area is account minimums. We know firms out there that are a $1 million minimum, and we know firms like ours that will take clients of any size. Because you have a large minimum doesn't mean you're a better financial advisor, it just means you're being more exclusive about who you're serving. So our thoughts here at Pathway Financial Group is we want to talk to everyone that wants a financial advisor. We want you to have an opportunity to meet with us. Another big point would be investment style. And I'm going to combine these last two points, the licenses that the advisor has.

There are advisors that are fully licensed to do stocks, bonds, mutual funds, REITs, and those advisors can give you any product that you want out there. There are other advisors that only have a Series 6 license and can only sell you mutual funds. And there are even advisors that only have their insurance license, and can only sell you an annuity or an insurance product. Those things combine and make a huge difference on what advice your advisor's giving you. The key is if they have the right licenses, that can change how they advise you, but you also want to get an idea of what their investment style is. If you're looking to buy and hold an investment, and you don't want a lot of change, you don't want to call to sell Ford, then you probably don't want an aggressive investment style. That's something to be upfront about with your financial advisor. If you're just looking to buy and hold something, a mutual fund, an ETF might be the right thing for you.

So those are the things that would help you in looking for a financial advisor and differentiating who's out there and what kind of style you're looking for. So if you're looking for help, we would be glad to help you. Please give us a call at Pathway Financial Group, (717) 690-1335, or jump on our website at and click on the schedule button to schedule an appointment. Thank you.

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