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A Small Business Owner’s Guide to Choosing the Right Financial Advisor

Posted by Arya Chatterjee

November 7, 2023

Why you need a financial planner and how to choose the one that’s right for you. 

In the ever-evolving landscape of entrepreneurship, financial stability is the anchor that keeps your ship from sinking. The decisions you make regarding your business’s finances are crucial, and unless you’re a book-balancing wiz, a skilled small-business financial advisor can be your guiding star. 

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A good financial advisor will help with everything from setting financial goals to developing a budget to investing for retirement. Securian Financial Group studied what small business owners felt were the top concerns financial advisory services could solve. The answers covered the gamut of business ownership and wealth creation:

  • 76% Rising healthcare costs 
  • 74% Making a profit 
  • 72% State of the economy 
  • 66% Taking care of the family financially 
  • 63% Controlling costs 
  • 58% Building wealth for myself 
  • 53% Personal retirement plan 
  • 52% Managing cash flow 
  • 40% Keeping track of books 
  • 38% Exit strategy for myself 

As you can see, others have recognized the importance of a financial advisor. This guide will delve into the critical steps to finding a financial advisor for your small business, someone who can help you achieve your entrepreneurial dreams while ensuring your business stays afloat. So, let’s set sail and explore the seas of financial guidance to chart a course for your company’s success.

Choosing the right financial advisor for your small business

  • Determine your needs

Before hunting for a financial advisor, take some time to understand your financial needs. What goals are you looking to achieve? Do you want to secure funding for your startup, plan for retirement, manage taxes, or all of the above? The right advisor will help you meet all your needs. 

  • Credentials matter

In the world of financial advising, credentials are like the crown jewels. You’ll want to look for designations like Certified Financial Planner (CFP), Certified Public Accountant (CPA), or Chartered Financial Analyst (CFA). These titles indicate that the advisor has a baseline of skills and adheres to high ethical standards. Lastly, verify if they’re registered with the appropriate regulatory bodies.

  • Experience counts

Look for advisors who have experience working with small businesses similar to yours. They will better understand the financial challenges and opportunities unique to your industry. 

  • Ask for recommendations

The best way to find a good financial advisor is to seek guidance from your peers in the industry. Ask fellow entrepreneurs for recommendations of advisors they have worked with. 

  • Interview multiple advisors

You can’t hire a crew member without an interview. The selection process needs to be more in-depth than a cursory glance at a financial advisor’s resume. Interview multiple candidates to understand their communication style, compatibility, and approach to financial planning. You’re looking to ensure that their vision aligns with yours.

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  • Fee structure

Now comes the price of advice. Learn how the financial advisor charges for their services. Some charge a percentage of the assets they manage, while others opt for an hourly fee or a flat rate. Make sure their fee structure fits into your budget.

  • Clear communication

Clear and open communication is the key to a tremendous financial advisor-client relationship. Your advisor should be a master at explaining complex financial concepts in a way that you understand. They should also be available when needed and responsive to your questions.

  • Fiduciary duty

In a financial partnership, you want someone with fiduciary duty, which means they are legally bound to act in your best interest. This ensures that they will prioritize your financial well-being above all else.

  • Evaluate their investment strategy

If investment management is essential in your financial strategy, ask the advisor for their investment approach. Are they conservative, or will they go guns blazing? Ideally, they should strike a balance between the two, and their practice must align with your risk tolerance and financial goals.

  • Check references

References from past or current clients are more valuable than you think. Speaking with them for valuable insights into their track record and work ethic.

  • Understand the services

Ensure you comprehend the services a financial advisor is offering. Will they help you plan your retirement, provide tax-saving strategies, cover employee benefits, and more? 

  • Trust your gut

You’re the captain navigating this ship, so trust your instincts. If something feels wrong, feel free to steer in a different direction. A successful business journey rides on trust and compatibility. 

The bottom line

Finding the right business financial advisor for your small business is like discovering a pot of gold, one that can significantly impact your financial health and business success. In your entrepreneurial voyage, your dreams and ambitions deserve the support of a knowledgeable and trustworthy financial partner. 

Take the time to analyze your needs, interview suitable advisors, and ask the tough questions. The effort pays off with a financial partner who will help you sail through the economic seas of entrepreneurship with confidence and peace of mind. Your small business deserves this and much more.

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Want to know more about startups and what it takes to get started?  Since 2006, Escalon has helped thousands of startups get off the ground with our back-office solutions for accounting, bookkeeping, taxes, HR, payroll, insurance, and recruiting — and we can help yours, too. Talk to an expert today.

This material has been prepared for informational purposes only. Escalon and its affiliates are not providing tax, legal or accounting advice in this article. If you would like to engage with Escalon, please contact us here.


Arya Chatterjee
Arya Chatterjee

Arya Chatterjee is a freelance writer and consultant from Mumbai. With a background in journalism and over five years of creative writing experience working with legacy media like Architectural Digest and Femina India and brands like The Label Life, and Macy's, she crafts unique and compelling stories that engage the readers. She enjoys writing about health, beauty, fashion, and lifestyle and exploring the symbiotic relationship between thriving businesses and happy employees through her writing. She is always looking to explore new avenues to expand her creative energy.

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