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How to Choose the Best Financial Mentor For Your Needs

Navigating the financial world takes a fair bit of knowledge and skill—whether you're trying to balance a personal budget or file your business taxes.

You may find yourself in all sorts of avoidable financial messes if you don’t have much in-depth knowledge of how to work the system. Fortunately, financial mentors nowadays aren’t just for the super-wealthy.

A qualified financial mentor can be your key to the financial health that you desire for your personal needs or your business.

At MentorCruise, we firmly believe that mentorship is a powerful tool for personal and professional growth. In this article, we’ll outline the value a financial mentor can bring you, and explain how you can decide on the right mentor for you.

Ready to take control of your finances? Let’s dive in.

What is a financial mentor?

A financial mentor’s main goal is to arm you with knowledge and skills that ensure your financial well-being. Ultimately, a great financial mentor takes a non-judgmental approach while providing you with useful, reliable financial advice.

A financial mentorship can take many forms, including:

  • Providing you with actionable guidance to navigate the system to control your debt. A financial mentor can help with constructing effective negotiations for reduced payments or generating a better financing strategy to handle debt payments.

  • Advocating on your behalf when you’re too overwhelmed to negotiate with lenders or creditors.

  • Referring you to other helpful financial support providers.

Different types of financial mentors

“Financial mentor” is a broad term that includes a range of financial professionals. Before you decide on a mentor, it’s important to understand the different types of professionals that can provide you with financial support and the scope of their services.

Investment advisors

An investment advisor is an individual or company that provides clients with investment advice. Most investment advisors offer fully-managed services—meaning they handle everything from researching investments to buying and selling them for you.

An investment advisor is your best option if you’re looking to manage your investment portfolio or just want to get started with investing. It’s best to make sure that your investment advisor is registered with a state securities regulator or the Securities and Exchange Commission (SEC).

Broker-dealers and brokers

A broker-dealer is an individual or company that purchases and sells securities like stocks, bonds, and mutual funds.

They can buy and sell these securities either on behalf of their clients (as a broker) or for themselves (as a dealer). Broker-dealers need to be registered with the SEC and be active members of the Financial Industry Regulatory Authority (FINRA).

Certified Financial Planners (CFP®)

Certified financial planners have passed the rigorous training, met experience requirements, and hold a certification from the CFP Board. They're also held to high ethical standards to ensure that they give valuable service to their clients.

Unlike investment advisors and broker-dealers, financial planning services don’t require the service provider to hold any registration or licenses. That's why looking for the word “certified” in their title is especially important.

While not all uncertified financial planners are out to get you or are even bad at their jobs, working with one means doing quite a bit more due diligence. It's much easier and less risky to let the CFP Board handle the vetting process.

Wealth Manager

A wealth manager works with wealthy clients who have more complex financial needs than the average person. Many wealth managers have set thresholds when it comes to net worth or investment portfolio value—and that can make them quite exclusive.

They usually offer holistic financial planning and management services, including:

  • Estate planning

  • Succession planning

  • Investment guidance

  • Charitable giving

  • Taxes

Financial therapist

A financial therapist specifically helps with improving your relationship with money so that you can make better financial decisions. They will use a combination of financial coaching and behavioral therapy techniques to help you unlearn bad habits and escape negative thought loops that are hurting your financial situation.

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.

How to Choose the Best Financial Mentor

Step 1: Think about what you need help with

Before seeking out a financial mentor, it's important to know what type of financial help you need. This requires taking an honest look at your financial situation, mental state, and skill set.

Introspection can be challenging, though. To help you get started, here are some guiding 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 will hopefully provide clarity regarding which type of financial mentor you should be seeking—and which types you should be avoiding. If you’re just starting your investment portfolio, you wouldn't want to hire a costly advisor who specializes in complex financial solutions.

Step 2: Find a financial mentor that suits your needs

Now that you have a clear understanding of your financial situation and have set some goals, you can start searching for potential financial mentors.

One tip to get the most out of your mentorship experience is to prioritize mentors who offer online services. This is a great way to make sure your mentor is accessible when you need them.

With MentorCruise, booking online sessions is as easy as tapping a button—just choose an open slot, and you're good to go. You can also read about each mentor's background, expertise, and reviews to find the perfect match for your needs. Plus, with a satisfaction guarantee, you can rest assured that you're getting the best value for your money.

Step 3: Review each potential financial mentor’s credentials

Some of the titles a financial mentor can claim aren’t tied to any kind of credentials or regulatory bodies whatsoever. “Financial planner”, “financial advisor”, “investment advisor”—anyone can claim these titles, set up a website, and start selling their services.

So, it’s important to review each potential mentor’s credentials. What credentials should you look out for? Here are our four especially reliable ones:

You should also be looking for a mentor who also has at least three years of professional financial advising experience under their belt.

The type of credential your mentor has will depend on the type of services they’re offering. But if any of them offer investment advice as part of their services, they should be officially registered. You can use BrokerCheck to verify a financial mentor’s state or SEC registration, as well as their employment record to check if they’ve been flagged for any disciplinary actions.

Step 4: Ask these 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 to 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, it's almost always safer to go with a fee-only mentor. 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 clients' best interests.

Get Expert Financial Support On Demand

Having a financial mentor can be a game-changer for your personal and professional growth. They can provide invaluable insights and guidance to help you navigate the complex world of finance.

With MentorCruise, you can easily access expert mentorship on demand, no matter where you are in the world.

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