How to find a financial advisor

Key Takeaways

F inancial advisors can help you develop a financial, insurance, and tax plan, investment management, and retirement planning.
A broker can give you independent investment advice, while an agent works on behalf of a company.
The difference between commission-based and hourly-based financial advisors is how they are paid.
PerFinEx is a commission-based advisor that believes in providing sustainable financial advice based on a good financial plan.

Introduction: How financial advisors can help you

Finding a financial advisor is an important step in making sure you’re taking smart financial decisions. In addition, the financial advisor should ensure that you can achieve your specific needs and financial goals. For example, a financial advisor can help you with the following:

Developing a financial plan: A financial advisor can help you create a comprehensive financial plan that takes into account your current financial situation and your short- and long-term financial goals. The plan may include advice on budgeting, saving, investing and debt management, among other things.
Investment management: Financial advisors can help you create and manage an investment portfolio tailored to your risk tolerance and investment goals. They can also tell you which types of investments (e.g., stocks, bonds, mutual funds, real estate) are right for your individual situation.
Retirement planning: A financial advisor can help you plan for your retirement by determining how much you need to save and invest to ensure a solid standard of living in retirement. The advisor will also help you determine what types of products (e.g., Rürup pension, Riester pension, private pension, company pension) are best for you.
Insurance: An advisor can help you make informed decisions regarding insurance, whether it’s for your car, home, health, life insurance, disability, or long-term care insurance.
Tax planning: A financial advisor can help you reduce your tax burden by advising you on tax-advantaged investment and savings options such as the Rürup, Riester pension, and real estate. Real estate, in particular, can reduce your own tax burden tremendously.

It is important to note that financial advisors cannot do any magic to make you rich in one fell swoop. But they know how the rules work, how to play by them, and what different investment options are available. So, if you find the right financial advisor, they can create an excellent customized plan for you that will best prepare you for your financial goals. Therefore, this article will focus on what to look for when choosing a financial advisor and how to find a financial advisor.

What is the perfect financial strategy for you? Let’s find out together.

Fundamental Decision 1: Broker Vs Agent

The first important decision to make is whether to use a broker or an agent. Both are financial professionals that you can ask for help with such matters as investment decisions, insurance products, financial planning, and real estate. However, there is a key difference in the way they work and the services they provide.

Agent (Vertreter): An agent is someone who works on behalf of a company and represents its interests by selling its products or services. For example, an insurance agent works for an insurance company and sells insurance policies to customers. He is usually limited to the products and services of the company he represents and therefore does not have access to the entire market.
Broker (Makler): A broker, on the other hand, is an independent professional who has access to a wide range of products and services from several, if not all, companies. They work as an intermediary between buyers and sellers, helping to match customers with the products or services that best meet your needs.

Now, to find out if the person you are talking to is a broker or an agent, you can easily take a look at the advisor registry (Vermittlerregister.info). Here, for example, is our registry excerpt. This confirms that PerFinEx GmbH is an independent financial advisor. Meaning that we have an almost unlimited number of investment products, insurance products, and banks.

In summary, the main difference between a broker and an agent is that an agent works for one company and sells its products, while a broker works independently and has access to the products of several companies. So, should you be looking for a financial advisor, you should definitely pay attention to what type it is.

Intermediary register excerpt for PerFinEx GmbH

Fundamental Decision 2: Commission Vs Hourly-Based

Both of the above advisors, of course, need to earn money. So now comes the second big decision to consider when choosing a financial advisor. Namely, whether it is commission-based, or hourly-based consulting. Both can offer you similar or the same products and advice. However, here the differences lie in the payment for the advice.

Commission-based financial advisors: Brokers and agents are paid in a kind of affiliate commission. The company, whose product you choose, gets a new client, because of the advice. Therefore, the company pays a commission to the broker. In this case, a broker is also advantageous, because they do not focus only on one company, but work with all of them.
Hourly-based financial advisors: An hourly-based financial advisor, on the other hand, is paid for their services based on the time they spend with clients. They charge an hourly rate for their advice. Because they do not receive a commission for selling products, financial advisors on an hourly basis may be less motivated to recommend certain products. However, this often involves a deliberate attempt to drag out the advice as more can be earned that way.

Both commission-based and hourly-based financial advisors should provide you with honest advice whose results are tailored to your personal situation. This is also the most important point you should consider. The advantage of commission-based advice is that you can see relatively quickly whether your interest is the priority. If this is not the case, you can cancel the consultation and, unlike hourly-based consulting, at least it did not incur any costs.

Cost is also a key factor. Of course, it is important for a commission-based consultant to sell products in order to keep the business running. However, the same applies to the hourly consultant. That’s because consulting basically relies on making money. So look for an advisor you can trust and who has your best interests in mind.

Are you convinced of our objective opinion as a financial advisor? Then let’s take a look at your financial planning together.

Conclusion: Where can PerFinEx be classified?

As you have already noted, we as PerFinEx are an independent commission-based broker. We can tell you with a clear conscience that the products and companies selected are not based on the highest possible commission. Neither do we know the exact rate, nor are we interested in it. In fact, we strongly believe in sustainable financial consulting in the best interest of our clients.

For us at PerFinEx, it is much more important that the entire financial plan works for you as a customer than squeezing out every single euro here and there. We prefer to work with satisfied customers who keep coming back and recommending our service rather than selling any products for a few euros more in commissions.

So if you need help with your financial planning, you’re interested in taking your personal financial situation to the next level. Then don’t hesitate to get in touch with us. Together we can develop a strategy that is perfectly tailored to you. For this, feel free to schedule a free meeting here.