People often seek a financial advisor when facing a financial pain point. This could be the desire to retire soon, a marriage, a divorce, college planning, or even tax or other financial issues. Just as getting car insurance before an accident is essential, so is seeking financial advice before you think you need it.

What Help Do You Need?
Many people come to me unsure of the right questions to ask, sometimes even apologizing for not being where they think they should be financially. The truth is, there’s no shame in not being where you want to be. Taking proactive steps to improve your situation is the most important thing, and something to be proud of when you take that important step.

When choosing a financial advisor, ensure they understand your situation and demonstrate strong knowledge in your specific areas of need. Inquire about their educational background and experience. As Ron Blue says, “You can’t take someone where you haven’t gone yourself.”

Determine if you need a comprehensive financial plan. A financial advisor can help you develop one that considers your individual circumstances, goals and risk tolerance. This plan should be tailored to your needs and reviewed and updated regularly. It should address areas like budgeting, assets and liabilities, any businesses you own, and potential tax consequences of investment accounts and other assets.

A good advisor will help you organize a scattered financial situation into a clear picture. They should also review your investments, including workplace retirement plans and other accounts, to ensure they are suitable, diversified and strategically allocated. They can analyze which investments make the most sense in different account types. For example, tax-exempt interest might be better in a brokerage account than a tax-deferred account. A competent advisor can help with this, as well as rebalancing your investments if any become too large a percentage of your overall holdings.

What to Expect
A financial advisor should provide ongoing support and education, helping you stay on track with your financial goals and make informed decisions. Remember, it’s your goals and your decisions, the advisor is there to guide you along the way to achieving what you deem to be most important. Look for someone who can explain complex concepts clearly. This could include how your taxes are calculated, how you can potentially defer taxes, or when you might want to pay taxes now to avoid a larger bill later. They should be able to explain why it might not be advisable to put real estate or a business into your 401(k) or IRA. They should also help you determine whether a Roth or traditional 401(k) or IRA is the better choice, and if Roth conversions could be a smart move in a given year.

Estate planning is another area where your advisor should be involved, working in conjunction with your attorney. They should help you ensure efficient gifting strategies and address whether giving equal amounts of your estate to each child is truly equal, as this isn’t always the case. In some situations, without proper planning, the biggest winner could be the IRS.

I tell potential clients there are two key things to consider when choosing an advisor, and you can use these as a test with any advisor you meet. First, do you think they are knowledgeable? I believe this should be evident from the first meeting. I don’t believe in withholding information until someone commits to working with me. You should leave the first meeting with action items, regardless of whether you choose to work with the advisor. Second, do you like the person? No matter how smart they are, if you wouldn’t want to spend time with them socially, or something about them annoys you, they’re probably not the right fit. This is an important relationship, and you deserve to work with someone you enjoy. This will keep you motivated to take the necessary steps to move your financial future forward.

Conclusion
Ultimately, it’s about peace of mind. You want to know you’re on the right track. If you don’t feel that way yet, I encourage you to seek the help you need to get on that path.

(Disclaimer: This article is for informational purposes only and is not tax, legal or financial advice. Everyone’s situation is different, so consult a financial advisor.)

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