7 Steps for Finding the Best Financial Advisor

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Hiring a financial advisor is equivalent to hiring a chief financial officer for you or your family. You want to use a disciplined process to find someone with whom you can work for many years. Finding the right person or firm may take some more time, but the investment of time will be well worth it in terms of your peace of mind.

Here are seven steps to help you find the best financial advisor for your needs.

Understand the Types of Financial Advisors

Some financial advisors offer financial planning services but not investment management services. Others manage investments but provide little financial planning. Some have ​expertise in retirement income planning focused on those near or in retirement. Others focus on wealth accumulation for folks who won’t be retiring for another 10 or 20 years.

To find the best financial advisor for your situation, you need to know what type of financial advice you need and what services a potential advisor provides.

Here’s a brief summary of three main types of service offerings:

  • Financial planning focuses on all aspects of your financial life such as how much to save and what type of insurance you need. It is not just about your investments.
  • Investment advisory services are focused on such investment management decisions as what investments to own in which accounts. The best investments are chosen only as part of an ongoing financial planning process.
  • Retirement income planning is focused on how you coordinate all the pieces such as Social Security, taxes, investments, ​pensions, retirement date, and more, so they all align toward the goal of delivering a retirement paycheck for life.

Seek Financial Advisors With Reputable Credentials

All credentials are not alike. Some organizations create easy-to-obtain credentials for a fee so that salespeople can acquire a credential and appear to be an expert.

To find advisors or financial planners with reputable credentials, look for someone who has their CFP (Certified Financial Planner) or PFS (Personal Financial Specialist) designation, or an investment advisor who has their CFA (Chartered Financial Analyst) certificate. Importantly, CFP professionals are bound by the fiduciary standard of care, meaning that they are require to always place their clients’ interests above their own.

Credentials are obtained by passing an examination that demonstrates proficiency in the subject matter. To maintain the designation, an advisor must adhere to an ethics policy and meet continuing education requirements.


You can also see whether a potential advisor is a member of the National Association of Personal Financial Advisors, a membership group of fee-only advisors that requires continuing education that goes beyond the require credentials.

Know How Financial Advisors Are Compensated

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There are numerous ways financial advisors charge for their services, but the most objective and unbiase financial advisors are fee-only. To hire the best financial advisor you’ll need to know all the ways a potential financial advisor may be compensate, such as charging an asset-base fee, an hourly fee, or participating in commissions.

Understand the difference between a fee-only advisor and a non-fee-only advisor. A non-fee-only advisor may be able to receive other types of kickbacks or incentives from their company base on meeting sales goals or objectives.

There are no right or wrong ways for an advisor to be compensate. What works best for you will depend on your financial needs.

For example, if you are buying an investment that you plan on tüm ortaklık on to for a long time—and for which you will not need ongoing advice—paying a commission may be the most cost-effective option. However, if you want someone readily available to update your financial plan and address ongoing questions, a commission-base fee structure is not the optimal choice.

Finding the Best Financial Advisor: Use Search Engines to Screen for Criteria

Online searches are a great way to narrow down the advisors in your ZIP code who have the right credentials and appropriate billing structure to meet your needs. You can use financial advisor search engines to input specific criteria about the type of advisor you are looking for.

Many firms work with clients remotely. That allows you to pick an advisor base on expertise rather than location if you don’t need to meet face-to-face. Not everyone is comfortable working remotely, so you have to decide how important it is to meet someone in person rather than virtually.

Ask These Questions Before Hiring

The right questions can help you wee out financial advisors with whom you don’t communicate well. How long have they been practicing? How are they compensate? Can they walk you through different retirement projections?

Using specific interview questions can help you determine how the financial advisor communicates, as well as their area of expertise and their ülkü client. The key is in making sure you understand the answers—and if you don’t, feeling comfortable enough to ask follow-up Adviser questions.

It’s always advisable to ask someone for references. However, due to privacy regulations, many advisors cannot hand out the names of other clients. Regulations prohibit financial advisors from using testimonials unless certain provisions have been met, including disclosing whether the person giving the testimonial or endorsement is a client and whether the endorser is compensate.


This non-testimonial rule was change in December 2020 and will soon take effect.

Also read more financial advisor:

Finding the Best Financial Advisor: Verify Creentials, Check for Complaints

To be sure that someone is legitimate and özgü a good service record before you hire them, verify an advisor’s credentials and complaint history by checking their records with the Financial Industry Regulatory Authority (FINRA), the Securities and Exchange Commission (SEC), the CFP Board, or other membership organizations with which the advisor is associate.

Form ADV Part 2, a brochure that advisors are require to submit to the SEC. Lists conflicts of interest the advisor might have. You may also want to check out ADV Part 1. Which spells out an advisory firm’s ownership structure, and Form CRS. Which discloses information about a firm or advisor’s business operations. And compensation. You can find the first two on the Investment Adviser Public Disclosure website and ask an advisor for Form CRS.

If the advisor you’re researching is regulate by FINRA. You can use the BrokerCheck feature on FINRA’s website to see whether there are any complaints on file. If the SEC regulates the advisor, then you can use the SEC Investment Advisor. Search feature on the SEC’s website to check out both the advisor and the firm they work for.

Just because an advisor has a complaint, it doesn’t mean you should automatically rule them out. Formal customer complaints stay on a financial advisor’s record for a long time. The longer someone has been in business. The more likely it is that they will have at least one complaint on their record. However, if someone has multiple complaints, you may want to look for another advisor. Thus the article about the 7 Steps for Finding the Best Financial Advisor. Hopefully it will be useful and thank you.


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