How to Choose a Financial Advisor

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Choosing the right retirement plan or deciding which mutual fund will yield the best results for you can present quite a challenge. You may not be sure how much to invest, how much to save, how much risk to take and when to adjust that risk. Therefore, you may find it crucial to enlist the aid of a financial advisor who can provide a guiding hand for our money management. To assist you in finding a good financial advisor, several top financial experts weigh in with their tips for choosing a financial advisor who is a good fit for you and your financial situation.

Ask Around

The first step in finding a good financial advisor is asking for referrals. "You ask your friends, family and co-workers for restaurant and hotel recommendations, for example, so why wouldn't you do the same when looking for a financial advisor?" says Marc Scheipe, CFO of Sage North America in Lawrenceville, Georgia. Ask questions that will reveal factors that are important to you in a financial advisor, such as, "How was your first meeting?" "How easy was he to get on the phone?" or "Do you understand what he says?"

Go Online

Recommendations are a good start, but take time to do your own research. In fact, it's important to understand the specialty and niche area – like retirement, charitable giving, asset allocation or estate planning – of each advisor you research, says Joyce Franklin, CPA, CFP, principle of JLFranklin Wealth Planning in Larkspur, California. She recommends three professional association websites to search for financial planners: the Certified Financial Planner Board of Standards, the Financial Planning Association and the National Association of Personal Financial Advisors.

Decipher the Initials

Financial planners generally come with many initials at the end of their names, and it's important to know what they represent. Many credentials are out there, so you need to understand what the credentials are, says Mackey McNeill, CPA, PFS, of Mackey Advisors in Bellevue, Kentucky. While most people know a CPA is a certified public accountant, not many know that PFS stands for personal financial specialist.

Choose Between Fees and Commissions

Most, if not all, financial advisors fit into one of two categories: fee-only planners and those working on commissions. Fee-only planners are good to help develop a strategy for investment and help you understand what your goals are and how to get there, says Jerry Love, CPA, member of the National CPA Financial Literacy Commission in Abilene, Texas. Financial advisors working on commission charge a percentage based on your assets or the products you buy.

Schedule an Interview

Once you have a working list of possible financial advisors, schedule appointments to meet with each one. "Meet face to face, and have a conversation," Love says. "I want you to feel good with their communication style. They should understand what you want." Most financial advisors offer free consultations for the first visit so you both can evaluate each other to determine if the relationship will be a good fit.

Get Fired Up

When talking with potential financial advisors, it's not unusual for them to focus on all the positive assistance they can provide for you. However, it's important to discuss the negative as well. Ask them what clients they have fired and what clients fired them, says Jeremy Kisner, CFP, president of Surevest Wealth Management in Phoenix. "You can learn a lot about the advisor by hearing why these things didn't work out."

Behaving Badly

Don't be afraid to ask your potential financial advisors whether they have been formally disciplined. "Regulatory organizations like the Financial Industry Regulatory Authority keep records on an advisor's disciplinary history," Kisner says. "Make sure to do a background check." In fact, you can check the background of an investment professional right on the FINRA website. Check, too, with the local office of the Better Business Bureau and chamber of commerce.

Take Your Time

When evaluating financial advisors, take time to get to know the person before discussing your financial situation and goals. Pay close attention to the point where the advisor introduces a financial product. "Is it quick?" McNeill says. If the advisor gives you a risk profile and advice on how to invest before you've had adequate time to evaluate one another and your financial situation, "rethink this choice," he says.

Be Comfortable

When talking with financial advisors, take a moment to gauge how you feel with them. Initial nerves are common, but they should dissipate as the meeting progresses if you feel comfortable with the other person. "If you're talking to someone and you aren't willing to ask them questions about how they get paid or sharing personal details of your life, then you need to rethink if this person is right for you," McNeill says.


About the Author

Karon Warren has covered travel for nearly 20 years with numerous print and online publications. Her byline has appeared in USA Today, USA Today’s 10 Best,, and many others. She is a member of both the Society of American Travel Writers and the American Society of Journalists and Authors. In addition to her freelance work for other clients, she also writes for her own travel site,

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