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How to Choose the Right Financial Advisor for Your Small Business

How to Choose the Right Financial Advisor for Your Small Business

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Only 50 percent of entrepreneurs use a financial advisor for business matters, according to a survey conducted by the Securian Financial Group. If you're in the group who's not getting consistent and professional financial advice, we have a question for you: Why? Maybe you don't know which type of advisor best suits your circumstances. Add this to an independent spirit and an already-packed schedule, and sometimes it just seems easy to do it yourself.

It's not. A professional financial advisor can help you budget, control costs, manage cash flow, raise capital and plan for retirement. Don't try to make a go of this yourself. When it's time to pick a financial advisor for your small business, follow these tips:

Educate Yourself

Learn more about the various types of financial advisors through the Certified Financial Planner Board (CFP). The organization lists both personal and small business financial planners who meet the educational, testing, work experience and ethics requirements of CFP certification.

The types of financial planners include accountant, attorney, estate planner, insurance agent, investment adviser and stockbroker. Each specialty comes with its own experience and knowledge, and entrepreneurs should look for an advisor with specialties in tax planning, risk management and retirement planning. If you have enough extra capital to invest outside your business, consider a planner with investment experience, and if you need to plan for the transfer of your business after your death, look for a planner with estate planning experience.

Ask for a Referral

Ask friends and relatives for referrals—whom they use and how they like him or her. Don't just take their referral and run with it, however. Find out what these planners specialize in, the credentials and licenses they hold, how much time they spend with clients and how long they have been in business. Ask about any reasons they don't like their financial adviser, too. It could be he or she is hard to reach sometimes or books up too quickly. Figure out what your priorities and preferences are in these areas.

Narrowing Down Your Options

Visit the Financial Planning Association and use their online search tool to find someone who fits your specifications. You should also check out MeetAdvisors, a website dedicated to connecting entrepreneurs with financial advisors. You can search for an advisor by area of expertise, length of experience or location.

You may wish to find a financial planner based on upcoming changes, be they personal or professional. You might be sending a child off to college, going through a divorce or saving for a home. For example, you may have questions about selling your future structured settlement payments and using the lump sum to help fund your business or buy a new home. There are financial planners available to help you reach all kinds of goals.

Meet Face to Face

Entrusting someone with your financial future requires the ability to communicate on key points, so make sure to meet with a potential financial advisor face to face before taking the next step. Take this list of questions with you, and good luck.

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