Finding an asset allocation that’s right for you

Successful wealth management isn’t something that just happens. Financial planning relies heavily on investments that are selected with a strategic foundation in mind, geared toward your unique situation and long-term financial goals.

Often including a mix of asset classes such as bonds, equities, real estate and commodities, the proper allocation of resources among your portfolio has a two-fold outcome: it enables you to effectively meet your goals while providing a clear picture of potential losses in the event of an unexpected economic downturn.

However, this does little to compensate for the unpredictability of returns within most asset classes, something that becomes even more problematic when planning for retirement or major investments, like a house or college tuition. That’s why professional wealth managers try to remove as much of the potential for risk as possible, focusing on the ideal percentages within each allocation to achieve the optimal level of risk reduction.

In addition, an experienced independent financial advisor will help determine exactly how much risk can be omitted without impacting upside potential.

What to look for in an independent financial advisor

Wealth managers possess a varying level of experience and capability. And similar to doctors, attorneys, CPAs and other specialized professionals, choosing the right one can be tricky. But there’s a reliable set of criteria that can easily help you select not only the best one, but the one that’s best suited to you.

When choosing a financial planner, pay attention to:

Experience. How extensive is their resume? In particular, make sure the independent financial advisor you hire has experience with investment and planning, not just “life experience” or other unrelated work experience. Look for tenure and a wide variety of financial circumstances that the financial advisor has consulted on and been exposed to. Like hiring anyone else, ask for referrals from the candidate’s clients and colleagues.

Relevancy. Is the financial advisor you’re considering up-to-date on the latest practices and regulations? Experience is important but continuing education is a must. Although no one can know all facets of an industry, the key to finding a financial planner who consistently performs above others is selecting the one with a proven dedication to learning and staying current in an ever-changing environment.

Capability. Is the wealth management practice big enough to service all your needs? Independent financial advisors operate within a service industry. As such, the one you select should be big enough to competently handle anything you need in-house. At the same time, you may want to avoid firms that are so large you become little more than a number, losing out on the benefits that often accompany a first-name relationship with a local wealth manager.

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