According to experts like Nils Larsen, financial managers are crucial to small and large business operations. While many small business owners want to enjoy the freedom of DIY methods, at some point, company finances become too complex to handle without adequate business finance knowledge.
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5 Things To Know Before Hiring a Financial Manager According to Nils Larsen
Hiring a financial manager is not as simple as choosing the first listed expert in a Google search. You need to consider your business and the experience of the financial professional. Larsen suggests five steps to selecting a finance manager for your business.
1. Verify Credentials
Financial managers may possess various credentials and certifications. Most experts have a master’s degree in a finance-related field. Also, a prospective manager should have five years of experience in a financial occupation, such as an accountant, financial analyst, or securities sales agent.
You should also verify that the professional is licensed and accredited by the state. Every state has different standards and educational expectations.
2. Ensure Fiduciary Status
According to Nils Larsen manager, a small business should opt for a fiduciary advisor or manager. A fiduciary must legally act in the client’s best interest. Many business owners and individuals do not realize that financial advisors can have the option of working in their own best interest, meaning against the best interest of the client.
A fiduciary cannot put themselves above their client. If the fiduciary financial advisor knows of two financial recommendations, one of which benefits them financially and another that helps the client, they must recommend the client-focused option.
3. Acknowledge Fee Structure
Working with financial managers or advisors who operate with a flat fee, not commission, is also important. A commission-based advisor automatically presents a conflict of interest; they will work to receive the largest commission, which may or may not be in the client’s best interest.
A flat-fee advisor is not looking to earn profits from the products they recommend. They are working for a predictable and stable rate, meaning no matter what financial products you use, the advisor has no ulterior motive or financial incentive.
4. Investigate Reputation
It is challenging to find the right financial manager for your business. Many wealth management firms seem to offer the same services. To make the decision-making process more manageable, consider asking competitors which firms they work with. You can also ask business partners for suggestions.
Asking other businesses for recommendations can help you make a list of potential managers. With a list, you can search only and ask for references to investigate their reputation.
5. Explore Experience
Before hiring any financial manager, ask them about their experience. You want to know how many years they have under their belt. Also, you want to ask about their experience working with similar small businesses.
According to Nils Larsen, financial managers are crucial to small business success. Taking your time and exploring your options is necessary for the selection process.