How to Choose the Best Financial Mentor For Your Needs

Finance isn't an easy topic. A lot relies on it, so finding the best financial mentor can make all the difference.

Unfortunately, nowadays, online financial mentors have this "image." The "image" they have isn't great, with people selling poor courses, even worse mentorship, or just plain lies about investing just so they can get richer.

At MentorCruise, we have a series of highly qualified financial mentors who are some of the best in the industry. They understand the importance of finance alongside the sensitivity of the topic.

In this article, we'll outline the value a financial mentor can bring to you by discussing:

What a financial mentor is
The different types of financial mentors
Why financial mentors are important
How to choose the best financial mentor for you

What Is a Financial Mentor?

A financial mentor primarily aims to equip you with the necessary knowledge and capabilities to secure your fiscal health. In essence, an exceptional financial mentor adopts an impartial stance while offering dependable and actionable financial counsel.

Different Types of Financial Mentors

Investment Advisors - They can advise you where and how best to invest your funds and manage any related plans or accounts.
Broker-Dealers and Brokers - They oversee the purchasing and selling of stocks on behalf of clients while adhering to fair practices.
Certified Financial Planners (CFP) - Certified financial planners offer expert help with managing finances, and many possess special certifications as proof.
Wealth Managers - Wealth managers provide individuals with assistance with substantial finances by offering various services, including advice about investments and planning for the future.
Financial Therapists - Financial therapists assist their clients in bettering the way they manage their funds through combining financial coaching with emotional therapy.

How to Choose the Best Financial Mentor

Step 1: Think about what you need help with

Before seeking out a financial mentor, it's essential that you first assess what type of help is necessary for you. This involves taking an honest assessment of your current financial status, mental state, and skillset.

Reflection can be challenging. To help ease you into it, here are a few starting questions:

Do you need help structuring your business budget?
Do you want to create a long-term financial plan?
Do you need assistance with investments?
Do you need assistance with taxes?
Do you need to build a trust fund or get your estate plan in order?
Are you struggling in your relationship with money?

Answering these questions should provide clarity as to which type of financial mentor would best fit your needs and which ones to avoid. For example, when starting out investing, an expensive advisor who offers complex solutions might not be necessary.

Step 2: Find a financial mentor that suits your needs

As soon as you have an accurate understanding of your financial status and have set some goals, it's time to seek potential mentors in this area.

Optimize your mentorship experience by prioritizing mentors who offer online services. This ensures they'll always be available when needed.

MentorCruise makes online sessions easy with just the click of a button: choose an available slot and set a meeting time.

Plus, you can read up on each mentor's background and expertise, and see their reviews so you can select someone ideally suited to meet your needs.

Step 3: Review each potential financial mentor's credentials

When it comes to a financial mentor, you have a tonne of different types, as seen above.

For financial titles like "financial planner," "financial advisor," and "investment advisor," anyone can claim these. They don't need credentials or certifications to be regulated.

Because of this, you need to find a financial mentor with actual credentials. The top four to look out for are below:

Certified Financial Planner (CFP): Awarded by the CFP Board.
Accredited Financial Counselor (AFC): For all aspects of personal finance, awarded by the Association for Financial Counseling & Planning Education.
Chartered Financial Analyst (CFA): An investing credential awarded by the internationally recognized CFA Institute.
Personal Financial Specialist (PFS): Awarded by the American Institute of Certified Public Accountants.

If you want to double-check their certifications, you can use BrokerCheck to verify a financial mentor's state or SEC registration, as well as their employment record.

Step 4: Ask questions before hiring

Asking targeted questions before hiring a financial mentor is a great way to weed out the ones who aren't a great fit. Make sure you ask questions that cover key areas like expertise, communication style, and ideal clients.

Not sure where to start? Here are some suggestions:

How long have you been in this industry? You want someone with over 3 years of experience.
Who is your ideal client? This will indicate their area of focus.
Ask them to explain a financial concept to you (e.g., "What is passive?"): This will show you their communication style, and the best one will be the one that you can easily understand)

A suitable financial advisor candidate should answer these questions in a manner you understand. However, if they don't, you can always ask follow-up questions so that they can elaborate.

Step 5: Ask how they get paid

Financial mentors generally get paid in one of two ways: fee-only or fee-based.

Here's what those terms mean:

Fee-Based Mentors: These mentors may receive both a fee from their clients and commissions or incentives from financial product providers.
Fee-Only Mentors: These mentors get paid directly by their clients and do not receive any commissions or incentives from financial product providers.

When choosing a financial mentor, going with a fee-only mentor is almost always safer. Their advice isn't influenced by potential financial gains from recommending certain products to you, so you're at less risk of mediocre (or even bad) financial advice.

Plus, fee-only financial mentors, advisors, and planners are often fiduciaries, which means they are legally obligated to act in their client's best interests.

Why Are Financial Mentors Important?

To help plan your spending and saving

If you're running a business, it's not always easy to monitor your spending and saving goals without personalized guidance; there's just too much to keep track of. With a dedicated financial mentor, you'll be able to identify your business goals and draw up clear budget plans that align with those goals.

To access industry experience

The best financial mentors are people who have worked hard for their years of experience and industry qualifications.

When you find one of these mentors, you're getting access to years (sometimes even decades) of financial knowledge. This helps you avoid pitfalls while learning ways to elevate your business and achieve your goals.

To build confidence

A successful mentorship not only helps improve your skills and professional outcomes but also boosts your confidence.

A great financial mentor teaches you how to develop a more positive mindset when faced with financial challenges or setbacks, which enables you to maintain long-term motivation to meet your business goals.

Get Expert Financial Support On Demand

An effective financial mentor can make a tremendous difference in your personal and professional development. They offer invaluable guidance that can help navigate through the maze-like maze that is finance.

MentorCruise makes accessing expert mentorship simple from anywhere around the globe without ever leaving home. Simply request it whenever it suits your schedule - be that during lunch breaks, when traveling alone or even just at work!