Finding a trusted financial advisor can be difficult for many people. There are so many options to choose from: your neighbor who works for a national advising firm, a friend’s son who works from a home office, or a co-worker who day trades. How does someone find the right fit for their family and financial circumstances?

It comes down to knowing the right questions to ask, which is what this guide can help you do. For example, comparing large corporations that have professionals who mostly sell products and may have a few years of experience with a local firm or independent advisor is time-consuming and sometimes frustrating. But when you need help with financial decisions, it’s worth the time and effort to find the right fit. Make the search simple with our easy guide on how to choose a financial advisor.

Quick Guide: How To Choose the top Financial Advisors

What Are Their Credentials?

Not all financial advisors are the same! Do not get confused with meaningless designations. There are just a few to look for in a highly trained financial advisor.

A good financial advisor will hold a recognized designation like a Chartered Retirement Planning Counselor℠ or CERTIFIED FINANCIAL PLANNER™ Professional. It means that your advisor has passed a stringent exam administered by the Certified Financial Planner Board of Standards. The CFP® Board also keeps disciplinary records.

Another key consideration is if your advisor is a fiduciary. More on that below.

What Type of Advice Do You Need?

For every scenario, there is a financial advisor who specializes in that particular situation. Whether your long-term goals involve specialized investing in real estate or cryptocurrency, your first step when researching or interviewing an advisor is understanding their approach and specialties. 

For example, your financial needs may involve divorce planning. Or, it might be that you and your family need a plan involving a macro view of your assets and money. Asking questions about long-term versus short-term planning is also vital to finding the right advisor. For long-term planning, finding a firm with a variety of specialists and advice is key. A firm that has estate planning and tax advice helps ensure your financial decisions now do not have long-term negative ramifications.

Is this Advisor a Fiduciary? 

Want to make sure to avoid someone just selling products that aren’t in your best interest? Look in the advisor’s firm brochure, and see if they mention being a fiduciary. If they do, then as a fiduciary they have pledged to act in their client’s best interests at all times. For example, the advisor is frequently monitoring the holding in your account based on market conditions.

Financial planners who are not fiduciaries may operate with different standards. They can sell you anything that is merely suitable rather than ideal for you.

It is very important to ask your potential advisor if they are a fiduciary and how they make financial decisions with you and your family. Follow-up questions may be to see their firm brochure and client promise and ask how they are compensated for any and all products. Just because they are fee only for financial services does not mean they do not offer other products and services where they may receive a commission. Ask for the specifics.

How Do They Charge for Services?

Some advisors may receive a commission whenever they recommend a stock or investment. These advisors could have an incentive to steer you toward products that do not meet your needs. He or she may not give the most unbiased advice because they are incentivized to make a commission.

A growing number of advisors charge a flat fee for key services. For example, you might pay $3,000 for creating a one-time financial roadmap. Some charge by the hour, like lawyers. Advisors who charge a flat rate are not compensated by a fund or company to sell a product.

For a long-term financial partner that will help you invest and manage your money, expect to pay a percentage of the total assets they manage for you. The more assets you have, the lower the annual fee charged by the advisor. It is still wise to shop for rates and discuss rates with your advisor, but with this type of service, you don’t have to have millions in the bank to qualify for help.

Do they come recommended and match your needs?

The best way to find someone trustworthy is to ask friends and co-workers for recommendations. Asking your peers can help you find an advisor with experience working with clients in the same stage of life as you. Additional people to ask include other financial professionals in your corner like your CPA, attorney, union, or professional organization. Anyone who has worked with their wealth manager for a long time and developed a relationship can probably provide a solid recommendation for a local financial advisor.

After asking for recommendations you may have identified a great wealth management firm, but discover they cater exclusively to a specific type of client or require a certain amount of money to invest. Don’t take it personally! There’s a planner out there for everyone. You’ll get better outcomes and feel more comfortable working with a financial professional who is accustomed to working with people just like you.

The CFP® website also has a search facility to help you find top CFP® professionals near you. At TRPG we work with clients across the United States virtually and have offices in Denver, St. Louis, Kansas City, and the Cleveland-Akron area to serve our over 1,500 client families*.