How to Choose the Right Financial Advisor — A Guide for Entrepreneurs
Because you're a business owner, your financial advisor should know more than how to trade securities. You need an advisor who can help you plan and work toward your financial goals, manage the risks you encounter along the way and build a legacy for the next generation. You need someone who understands the cycles and pressures of entrepreneurship and has a track record to prove it.
Advisors who understand that their entrepreneur clients require more than standard financial services are often entrepreneurs themselves. Entrepreneurial advisors tend to be based in independent "registered investment advisors," or RIAs, overseen by the Securities and Exchange Commission.
In this article, I'll share a few specific things entrepreneurs should look for when choosing a financial advisor.
Related: You Have to 'Date' Your Financial Advisor to Find the Right One — Here Are 3 Tips to Doing Just That.
Because they've had experience as RIA owners, these advisors know the stages of business development from startup and early growth through achieving scale and, in some cases, selling the enterprise. Motivated by a fascination with personal finance in the context of business ownership, these advisors either focus on entrepreneurs exclusively or maintain a healthy roster of business-owning clients as a passion project within a broader practice.
Enthusiasm is no substitute for expertise, however. An advisor who can make sense of your business and personal finances has experience managing unpredictable cash flow, crafting investment strategies that complement your business and navigating complex tax scenarios.
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