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10 Questions to Ask when Hiring a Financial Advisor

February 18, 2019

Financial experts run the gamut from tax preparers to CPAs who can help you with a business, to people who specialize in things like drafting wills or advising you for retirement. Finding the right financial advisor can seem like you’re dating again. With all the questions and long-term goals, you’re looking for in a match. How do you find the right type of expert, ask the right questions, and get the help you need?

 

First, like in dating, you need to know what you’re looking for. Think about what you need and it will narrow your search. It’ll be easier to seek out a financial advisor once you have a title or type of business to seek out.  With easier access to more information than ever before, reading up on topics is a piece of cake (and common) for most of us. What are you looking to do? Start searching based on your needs, so you can develop your own list. Create your own list of questions specific to the service you need.

 

Next, ask around and look at websites, reviews, and recommendations from friends and family. There might already be a connection to someone—or many someones—in your network. Once you have an idea of what you want and the type of expert you’re looking for, consider asking these questions.

 

What are your qualifications?

Before you start talking to a financial pro, make sure you know what typical qualifications are. You don’t want to hire someone with the wrong education or training for what you need.  According to the Bureau of Labor Statistics in the U.S. the education requirements are a bachelor’s degree. The certifications and licenses required will be dependent on what the advisor is working on.

 

How much and what kind of experience do you have in this field?

It’s not necessarily a deal-breaker to have a greener financial pro. It is recommended to know whether your CPA has done the type of accounting you need, or if you are a financial advisor’s very first client!

 

What services do you provide?

Even if you’ve sought out a financial expert based on one need, it’s nice to know if they might be able to help you with further services down the road. Plus, websites aren’t always all-encompassing, so you might need some clarification before you start working together.

 

What are your fees? What is your fee structure?

Some experts take a percentage of the money you make, and others have services based on flat rates or monthly fees. Knowing how they get paid helps you understand what you’re paying for their services. Advisory HQ has a list of sample fee structures based on a recent report they created for financial advisors. The charts provided will give you an average reference as to what the typical costs are for management of assets and other financial management costs.

 

What are the total fees?

In addition to your contributions and the fees of your expert, there may be other fees you need to pay. For example, if you are advisor uses a mutual fund, there may be fees associated with that account that will be added to the advisor’s cost.  Ask what your all-in costs are and be aware of how even small fees can affect your overall outcome.

 

Are you a fiduciary?

A fiduciary works in your best interest. They have both, ethical and legal duties to act in the best interest of the party to whom assets are being managed. For example, shareholders, lawyers, and guardians are fiduciaries. The biggest difference between fiduciaries and other financial advisors, fiduciaries cannot act on their own interest. They cannot benefit personally from the management of assets while other financial advisors can.

 

What kinds of tools or guides do you have to help me?

Many financial experts can offer specialized tools or calculators. These tools will help you understand the financial potential of their services. Ask if they have more information or collateral they can send home with you for your own research and learning.

 

What services are available through your website or app?

Many millennials prefer to do tasks digitally. We want the ability to check on accounts 24/7 on our phone or computer. Knowing if there is an app or website that is available and mobile friendly is helpful when picking an expert.

 

How often should we meet or check in? What would our relationship be like?

When you first start a retirement plan you might not see much growth or movement for quite a while. Therefore, it’s likely won’t need to interface much with your expert. Once you have hired a financial pro, don’t be afraid to ask them some questions. You should be comfortable or checking in whenever you’d like to get their perspective. You could set up a yearly call about investments for a more regular update.

 

What kind of goals should I set?

You and your financial expert will want to have a conversation about why you’re looking for this product or service and what you hope to get out of it. He or she will help you understand if your desires are on point for what they can offer.

 

Finally, you want an expert who is a good fit. Some people have a special situation like owning their own business or freelancing. In that case, you’ll want a financial expert who understands your needs. You could want an advisor who cares more about educating clients versus someone who simply gives their opinion on what you should do.

 

Beyond that, you might have preferences that would be important to talk about during an interview. Many millennials have strong feelings about what causes to support. Did you know you can ask a financial advisor to ensure that your investments aren’t doing anything you wouldn’t agree with? For example, you can have a financial advisor invest in companies that are known for being socially or environmentally responsible only. You can also avoid investments that include controversial companies or those with values you don’t agree with.  It’s okay to shop around and find someone whose personality or experience fits best with you! It isn’t always a guaranteed marriage, but you have to start somewhere.

 

6 Reasons for Hiring a Financial Planner 

 

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2019-07-03
Measuring the Costs of Employee Turnover

Best-selling business management author Jim Collins was asked during a 2001 interview if he had identified a good business response to the economic slowdown that had gripped the nation. His widely quoted answer is as relevant today as it was at the time:   “If I were running a company today, I would have one priority above all others: to acquire as many of the best people as I could [because] the single biggest constraint on the success of my organization is the ability to get and to hang on to enough of the right people."   Nearly 20 years later and in a highly improved economic climate, Collins’ words still encapsulate the biggest challenge facing HR departments of corporate giants and small start-ups alike: finding and retaining quality team members. In an era of competitive recruitment and job-hopping staff, your company risks losing monetary and human capital each time a valued employee chooses to leave. Employee turnover impacts your bottom line and your company's culture. To set wise employee retention policies, you first need to assess the costs of staff turnover accurately and measure the full impact of employee loss.  

Direct Costs of Replacing Employees

A talented employee exiting your company costs you money. Estimates of how much employee turnover costs can vary by industry and employee salary. A study by Employee Benefit News estimates the direct cost to hire and train a replacement employee equal or exceed 33% of a worker’s annual salary ($15,000 for a worker earning a median salary of $45,000). Cost estimates are based on calculatable expenses like these:
  • HR exit interview & paperwork
  • Benefit payouts owed to the employee
  • Job advertising, new candidate screening & interviewing
  • Employee onboarding costs
  • On-the-job training & supervision
You can track the expenses of your company’s employee turnover using this online calculator, or create a spreadsheet to determine how actual costs add up to affect your bottom line.  

Full Impact of Employee Loss

Josh Bersin, a human resource researcher, writing for LinkedIn, refers to employees as a business’s “appreciating assets.” Good employees grow in value as they learn systems, understand products and integrate into their teams. When one of these valuable employees leaves, the business loses more than just the cost of hiring and training a replacement. Bersin cites these additional factors contributing to the total cost of losing a productive employee:
  • Lost investment: A company typically spends 10 to 20% of an employee’s salary for training over two to three years.
  • Lost productivity: A new employee takes one to two years to reach the level of an exiting employee. Supervision by other team members also distracts those supervisors from their work—and lowers the team’s collective productivity.
  • Lost engagement: Other team members take note of employee turnover, ask “why?” and may disengage.
  • Less responsive, less effective customer service: New employees are less adept at solving customer problems satisfactorily.
  According to Bersin, studies show the total cost of an employee’s loss may range from tens of thousands of dollars to 1.5 to 2 times that employee’s annual salary.  

Strategies to Slow Employee Turnover Rates

An effective exit interview helps you and your HR team pinpoint the drivers of your company’s employee turnover. You may find that hiring practices need to be refined or employee engagement should be enhanced. Changes to the break room space, such as fresh fruit or games, will allow your employees to relax and come back to work with fresh eyes and a better attitude. This will keep up the workplace morale, shaping your company culture to include perks appealing to younger workers and will lead to increased job satisfaction. Today’s employees are career-oriented and highly motivated. Keep them on your team with other opportunities such as:  
  • Pathway for advancement within the company
  • Professional development & advanced education
  • Flex-time & work-from-anywhere options
  • Management support & recognition
  • Lifestyle rewards or amenities like catering & concierge services
  • Culture of shared values & volunteerism
 

Add Student Loan Benefits Through ELFI

Student loan repayment tops the financial-worries checklist of many recent graduates. Older team members question their ability to pay for educating their children. New, highly desirable HR benefits like student loan contributions and financial literacy education are emerging from these employee concerns—and ELFI for Business is leading the way for employers to incorporate them into hiring packages. You can connect with ELFI directly from your HR portal and access multiple ways to contribute to employees’ student loan debt. We offer new-hire onboarding booklets, educational newsletters and onsite consultations filled with information for you and your employees. Reach out to us at 1.844.601.ELFI to add cutting-edge benefits to your HR employee package!  

Learn More About ELFI for Business

  NOTICE: Third Party Web Sites Education Loan Finance by SouthEast Bank is not responsible for and has no control over the subject matter, content, information, or graphics of the web sites that have links here. The portal and news features are being provided by an outside source – The bank is not responsible for the content. Please contact us with any concerns or comments.
2019-06-12
Should You Pay Off Student Loans Immediately or Over Time?

When you start your post-college career, you may be tempted to breathe a sigh of relief. Before you do that, you have important decisions to make. You’ll have to stretch your paycheck to cover your new lifestyle and associated expenses: a furnished home or apartment, vehicle, insurance, and hopefully a 401K contribution. If you are like 70% of college graduates, you also have student loans that need to be repaid.   In most situations, it's going to be most beneficial to pay off your loans as quickly as possible so that you are paying less towards interest. The average college graduate's starting salary, however often cannot allow for enough additional income to cover more than the regularly scheduled student loan payments.  Most student loans have a six-month grace period so you can do some budgeting and planning first - if you need to. We don't suggest using the grace period unless you find it necessary to organize your finances. During a deferment such as a grace period, the interest could still be accruing depending on the type of loan that you have.   If you determine that you may be better off establishing sound financial footing and a workable monthly budget before you begin repaying those daunting loans. Keep these tips in mind as you formulate a strategy for debt payoff.  

Student Loans Have Advantages

Varying types of debt are governed by different laws and regulations. Banks often base interest rates for consumer credit loans on your established credit rating. Interest rates for auto loans or credit card debt tend to be higher than a mortgage or student loan interest. As you review your debt load and make a plan, remember: student loan debt comes with a few "advantages" that other types of debt don’t offer.  
  • Preferential tax treatment: With a new job, you will be paying taxes on your income. Student loan interest is deductible up to $2,500 and can be deducted from pre-tax income.
  • Lower interest rates & perks: Federal student loans have lower interest rates and are sometimes subsidized by the government.
  • Lender incentives: Private student loans may come with incentives from the lender that make them a better deal than other credit types. These include fee waivers, lower interest rates, and deferment options.
  • Flexible payment plans: Options for lower payments and longer terms are available for both federal and private student debt.
  • Build your credit score: You can build your credit score with student loan debt. Now, depending on whether you’re making on-time payments or not, you could negatively or positively affect your credit. If you chose to make small payments during deferments, or a grace period, and regular on-time payments you will be more likely to establish a favorable credit record and reduce the amount of interest you pay overall.
 

Programs to Help You With Student Loan Payments

There are few options for loan forgiveness with regular debt, but student loans offer opportunities to reduce or eliminate your debt. These may come with commitments and tax implications, so be sure you fully understand them if you decide to take advantage of these programs.  
  • Loan forgiveness: Federal student loans may be forgiven, but you'll want to be sure that you're following all of the requirements needed of the program. Be sure before choosing this option that the federal loans you have qualify for the program. Also, keep in mind there could be taxes due on the amount that is forgiven. Some student loan forgiveness programs include PAYE (Pay as You Earn) and REPAYE (Revised Pay as You Earn), Public Service Loan Forgiveness, and Teacher Loan Forgiveness.
  • Loan Consolidation: Multiple student loans can be consolidated into one payment with the interest rate determined by a weighted average of your current loans - interest rates. Combining multiple loans may be easier to manage on a modest starting salary. Consolidating federal loans usually doesn’t require a good credit score, either.
  • Refinance, and you could achieve a lower interest rate: Lenders like Education Loan Finance specialize in student loan refinancing, and have options like variable interest rates and flexible terms. Refinancing your debt could make student loan debt easier to manage than other types of credit.
 

Pay Off High-Interest Debt First

Before you decide to pay off your student loans, think about the financial obligations you’ll be taking on. Instead of carrying a credit card balance or making low payments for an auto loan, it makes sense to continue your low student loan payments and pay off more expensive debt first or debt with a higher interest rate. In the long run, you’ll save money and build your credit score.   If you still have doubts about not paying off student debt first, consult a professional financial advisor for help prioritizing your goals and setting up a budget that lets you achieve them.  

Click Here to Learn More About Student Loan Repayment

   
2019-06-07
How Do You Know When It’s Time to Get a Graduate Degree?

The most recent data from the Digest of Education Statistics show that over 54% of those completing graduate studies take on student loans, and the average loan amount for grad school is over $70,000. With so much at stake, isn’t it worth a serious analysis of the value?  

Develop a Decision Matrix to Help You Decide

A decision matrix is an analytical tool that helps you compare different factors when making a choice. If you are about to take on more student debt to continue your education, a personal decision matrix that weighs the following questions can help you clarify your values and decide what makes both personal and financial sense.  
  • Why do you want a graduate degree? Motivation is a complex process, and you may not know what is driving you to continue your education. A little self-analysis is in order. Do you think graduate work will elevate your prestige, make you an industry authority, or help you find a more challenging job? Or are you afraid of leaving your college comfort zone and entering the workforce?
 
  • Do the jobs in your field of study match your talents and disposition? Do you thrive in a fast-paced environment or enjoy working with the public? Perhaps a predictable or solitary workplace suits you more. If you’ve never been employed in your chosen field, it might be wise to work for a while after completing your bachelor’s degree. You’ll get a better understanding of employment opportunities and personal satisfaction levels before investing more time and money toward an advanced degree. Working before pursuing a graduate program has two other distinct advantages:
 
  1. You can make progress toward paying off undergrad student loans.
  2. You will have time to solidify your life and career goals.
 
  • Will a graduate degree improve your employment and earning potential? Before committing to graduate school, do your research. Monitor the job market on sites like Indeed, Monster or Study job requirements, salaries, and the number of job openings. Talk to individuals in your field—both those with graduate degrees and those with four-year degrees. Will an advanced degree make enough difference in job availability, career stability, and earning potential to offset the time and money required to obtain it?
 
  • Are there alternatives for enhancing your employment value? Explore professional or specialized certifications that could make you more valuable to an employer. Obtaining certificates is usually less expensive than continuing with graduate studies, and added training indicates to employers that you take the initiative and possess advanced skills.
 
  • How will you pay for your advanced degree? If you already have student loans, adding more debt for graduate school could further delay your ability to achieve many financial milestones: marriage, purchasing a home, traveling, or starting a family. Often, grad school loans come with a higher interest rate and greater accumulated balance than undergraduate loans. You’ll need to determine whether the added earning potential of an advanced degree justifies the payments and payback period. It may also be worthwhile to explore alternatives like part-time studies and employer educational benefits to lessen the student loan burden.
 

Refinance Student Debt in Three Easy Steps With ELFI

You’ve graduated with a college degree and increased your earning power. Now, get the most for your money by refinancing your student loans with Education Loan Finance. Our competitive interest rates, personalized service, and nationwide availability give you the power to manage your debt and achieve your goals. With ELFI, you could be just three steps away from a brighter future!  

Click Here to Learn More About Refinancing Student Loans

    NOTICE: Third Party Web Sites Education Loan Finance by SouthEast Bank is not responsible for and has no control over the subject matter, content, information, or graphics of the websites that have links here. The portal and news features are being provided by an outside source – The bank is not responsible for the content. Please contact us with any concerns or comments.