If you’re a millennial, chances are, you don’t have a financial advisor. In fact, one survey found that just 11% of millennials regularly meet with a financial advisor, while 31% use either a robo-advisor or another investing app. But millennials have unique financial challenges, and there are financial pitfalls that millennials need to avoid. That’s why it’s good for millennials to not only find a financial advisor, but a financial advisor who’s attuned to their specific needs. Here’s what millennials should look for in an advisor.
The Right Accreditation
While it’s always a good idea to get some personal recommendations before hiring a financial advisor, be sure that whomever you hire has the right background, education and training. This often means one with a Certified Financial Planner (CFP) designation. CFPs earn this certification by completing a rigorous accreditation process, including exams, educational courses, and the required experience.
More specifically, financial advisors seeking out the CFP accreditation are required to have a bachelor’s degree from an accredited college or university plus complete the required CFP coursework, pass the 150-question CFP examination, have at least 6,000 hours of experience working in the financial sector, (or 4,000 as an apprentice) and adhere to a strict code of ethics. Hiring a CFP to manage your funds can help ensure you’re working with an advisor who truly has your best interests at heart.
There are other good certifications, as well. Among them are chartered financial analyst, chartered investment counselor, certified investment management analyst, certified public accountant and personal financial specialist.
Someone You Mesh With
You may not want to work with a financial advisor who seems more like a parent than an equal. Or you may be more comfortable working with one with decades of experience. You may respond well to a straight-shooter or may respond better with someone a bit more reserved.
Regardless, be sure you are working with a financial advisor with whom you have a good rapport. After all, you’re going to be talking to this person regularly and sharing with them some of your most personal information – in a word, your finances. You can’t be shy and you certainly can’t be uncomfortable when discussing important financial matters such as paying off debt, saving for retirement and adjusting your budget.
It’s also worth looking into a financial advisor’s after-hours and weekend policies. As a millennial just starting out in the workplace, you may not always have the time off to commit to an annual or bi-annual meeting with your advisor. And you shouldn’t have to. Find one with hours that meet your needs.
A Good Listener
When working with a financial advisor, it’s key that they take into account your short- and long-term financial goals, not just what they think you should be aiming for. For example, you might be more concerned with buying your first home rather than saving for retirement. That’s OK.
While your financial advisor should definitely share with you the statistics about the power of compounding interest and starting early when retirement planning, they should also take your goals seriously. In an ideal world, you’ll find a way to incorporate both into your financial strategy.
Understands Unique Needs and Goals