Not everyone should seek financial advice.

My view might surprise you. After all, I am an adviser who wholeheartedly believes that anyone can benefit from quality advice. But the value you receive needs to be worth its cost. Otherwise, you’re better off avoiding it.

Imagine you give me $10,000 and I give you back $100,000. That’s a great deal! You’re getting 10 times value on your “investment”. On the other hand, if you only get $1,000 in value, it means the advice might be good but its cost leaves you worse off.

This example shows why it’s crucial to understand a financial adviser’s value before agreeing to their fees. So, before speaking with an adviser, ask yourself:

• What value am I looking for from a financial adviser?
• What is the likelihood that this adviser will deliver the value I seek?
• Is the fee sufficiently less than the expected value?

Price Is What You Pay; Value Is What You Get

The value you get from financial advice can be unique and sometimes hard to measure, especially when considering the “intangible benefits.”

You can easily measure tax savings, fee reductions, and expected investment returns in dollars. If an adviser helps you save $100,000 in taxes, that advice is worth at least $100,000.

But how much is peace of mind worth? What about financial security? Do you value the confidence and clarity that professional advice brings to your financial decisions?

What is your time worth? A hands-on adviser can take care of your financial administration and advice implementation, allowing you to spend more time pursuing passions and connecting with loved ones.

These questions are innately personal but, as a general rule, the more complex your financial situation, the more valuable financial advice becomes.

Ask Questions of Yourself and of Your Adviser

Finding the right adviser will depend on what you’re looking for. Before speaking with an adviser, ask yourself the following questions:

• Do I need help with a specific financial issue?
• How complex is my financial situation?
• What are my short-term and long-term financial goals?
• What is my current level of financial knowledge?
• How much time do I want to spend on managing my finances?
• What level of service do I expect?
• What kind of relationship do I want with my adviser?

Once you understand your needs, you can make a more informed decision. And if you don’t take the time to ask yourselves these questions, a good adviser should facilitate this type of discussion before agreeing to engage with you.

When considering if an adviser is right for you, it’s crucial to dig deeper and ask the right questions. This helps determine whether the adviser can deliver the value you seek. Here are some examples to help you prepare for your discussion with them.

1. What are your qualifications and experience?

Understanding an adviser’s background can give you insight into their expertise and ability to handle your financial needs. Look for qualifications like Master of Financial Planning (MFinPlan) and ask about their experience with clients in similar situations to yours.

2. How are you compensated?

Advisers can be compensated in various ways—fee-only, commission-based, or a combination of both. Understanding their fee structure helps identify potential conflicts of interest and ensures their advice aligns with your best interests.

3. What services do you offer?

Different advisers offer different services. Make sure the adviser provides the specific services you need, whether it’s investment management, retirement planning, tax advice, or asset protection.

4. What is your investment philosophy?

An adviser’s investment philosophy can significantly impact your financial strategy. Ensure their approach aligns with your risk tolerance and financial goals.

5. Can you provide references or testimonials?

Hearing from other clients can provide valuable insights into an adviser’s competence and reliability. Ask for references or read testimonials to gauge their track record.

6. How will we communicate and how often?

Effective communication is key to a successful adviser-client relationship. Ask about their preferred methods of communication and how often you’ll receive updates.

7. What are your expectations of me as a client?

Understanding what the adviser expects from you helps ensure a successful partnership. Clear expectations from both sides foster a productive relationship.

The Bottom Line

Ultimately, the goal is to find an adviser whose expertise and services align with your needs and provide more value than they cost. By understanding what you value and assessing whether an adviser can meet your expectations, you can make an informed decision when choosing who to work with.