Having a financial advisor on your side during your journey to financial freedom as a nurse practitioner can be beneficial. Is it absolutely necessary? No, it is not, but they do have their uses. If you took my financial independence and investment course and follow the simple strategies within it, then you really don’t need a financial advisor. But if you feel like you need some expert eyes on your investments and overall financial health, then hiring a financial advisor can prove to be beneficial.
Do I have a financial advisor? Yes, I do. Why? Because my investment and tax situation are complex. My financial advisor and CPA work hand in hand to help me maximize my investment returns and reduce my legal tax obligations to the fullest. Could I do this myself? Sure, I could, but I have found that my time is better used on INCOME GENERATING activities vs. monotonous portfolio rebalancing and figuring out how to maximize my SEP-IRA…
Now, should you consult with your financial advisor monthly? Absolutely not… Most people can totally get away with using a financial advisor just 2-4 times a year. I usually only consult with mine quarterly.
If you have never used a financial advisor, you can expect them to get your finances in tip top shape during the first 1-3 meetings. They typically spend the first few meetings with you getting your expenses under control, helping you with strategies on paying off debt, and figuring out how you can budget appropriately so you can invest for the future. These first few meetings are INVALUABLE. It is one of the reasons why I am debt free… He kicked my ass into gear to pay off all my debt.
After you get your finances situated, they then will begin helping you with your investment allocations. They will guide you on stock market investing, your 401k/IRA, possibly real estate investing, life insurance, umbrella policies, and much more. Look at them as your guide to your financial wellbeing in MULTIPLE aspects.
Now, there are two types of financial advisors:
Fee-Only Financial Planners
Fee-Based Financial Planners
Fee-based financial planners are generally sharks. They want you to only invest in products that they get direct commissions from. Think of large firms like Edward Jones or Fidelity. They will want you to ONLY buy their investment products. Why? Because they receive commissions of 1-2% on these. While that might not sound like much, trust me, it is…. When you begin having a portfolio of $500,000+, that 1-2% ADDS UP. Plus, it is YEARLY, so it just compounds. Screw that.
You want Fee-only financial planners. These planners just charge you for their time. You pay them a set hourly rate for their time, and they will guide you WITHOUT INCENTIVE OR BIAS on what works best for you. Basically, they won’t guide you into something they are earning a commission on. This is what you want.
Ensure your financial planner is a Certified Financial Planner (CFP). This is a difficult certification to get, so these individuals “should” know what they are doing.
I have had a couple financial planners over the past 10 years. It is just like finding an accountant… You really need to trial and error with some until you find the right one for you.
Here is my advice:
Search online for Fee-Only Financial Planners. You will find websites that list them. Mine is in another state and I have never met the guy. We just do Zoom Calls.
Review 3-6 of their websites to “feel” out what they do.
They all offer free consultations, therefore schedule phone appointments with 3-6 of them and explain your financial situation. If they are trying to sell you shit, HANG UP. You want a financial planner who genuinely wants to know your situation and help guide you in developing the best strategy to meet your financial goals.
Ask them these questions:
How do you get paid?
What are your qualifications? (You want a CFP… even better if they have a degree in finance).
How often do we meet?
What do the first 2-4 appointments look like?
What is your investment philosophy? (Are they aggressive or conservative? In my opinion, you want someone in the middle).
What asset allocation will you use?
What services do you provide?
If you ask these questions and ENSURE they are fee-only, then you should be able to find a SOLID financial advisor that will help you in your nurse practitioner financial independence journey!