How to Find the Perfect Financial Advisor for You

It is a common misconception held by people new to the concept of professional financial planning that spending money on proper budgetary strategy is counterintuitive.

Nothing could be further from the truth, as a seasoned professional in the field of finance has experience and insight into aspects of saving, investing, stratifying assets and safeguarding against unseen fiscal catastrophes that an untrained layperson is highly unlikely to have. Your money represents your livelihood, quality of life, the doors that may or may not open for your children and your security as you age. Choosing the right person to handle this most fragile and vital portion of your life can be intimidating. There are several tried and true questions and methods you can utilize in your selection process to ensure that you choose the perfect financial advisor for you.

Look for the Letters

When you are talking to a financial planner, you want to know you are dealing with a professional who will protect your funds. For the most highly skilled, tested and vetted finance professional, search for those with the letters “CFP” are attached to their official title. “CFP” stands for Certified Financial Planner and indicates that this professional has not only passed extensive examinations and qualification in the field but is also being held to stringent continuing education standards that will help them stay current on wealth management trends. Financial planners can go by many different monikers, but if you do not see “CFP” trailing the end of whatever title a professional may choose, then you know that this person did not undergo the most rigorous training and certification available in the financial field, and is probably not the most qualified person you could find to handle the future of your money.

The next step down from the CFP is the Chartered Financial Consultant (ChFC). While these are certainly bonafide finance professionals and they have followed much of the same curriculum as the CFP, the ChFC has not passed the board exam showcasing the most expansive knowledge of wealth management and investing. If you are thinking of using a ChFC, then ask around for referrals and testimonials as well as checking up on the individual’s credentials to ensure past success rates.

A Registered Investment Advisor (RIA), also often called an Investment Advisor Representative (IAR) may be the best option if you are really only looking for someone to manage stocks, bonds, mutual funds and other such investments. This type of financial professional is geared less toward smaller, day-to-day budgetary planning but can be hugely helpful in making the most out of your annual salary and generally tend to have the most knowledge regarding the money industry. RIA’s and IAR’s are also mandated to provide you with a Form ADV Part II upon your request. Advisors, as well as state regulators, register with the Securities and Exchange Commission (SEC). You utilize this standard form to have access to vital financial and certification information about your advisor.

Lastly, the most common sort of financial planner you will find in the market is the classic CPA or Certified Public Accountant. These professionals can be best utilized if you are a small business owner, have an exceptionally high income or simply want tax preparation guidance. Many CPA’s will also obtain the Personal Financial Specialist (PSF) certification as a means of showcasing that they are able to aid clients in long-term, big-picture financial planning as well.

What’s in it for them?

Never agree to utilize the professional financial planning services of any firm or individual until you have asked the advisor you are thinking of using how he or she makes money. Does the planner make money by selling you particular programs or services? Is there an hourly fee or initial planning fee? Does this person acquire income based on a set percentage of the assets he or she manages for you? It is imperative to know what the cost of any financial plans with this person is going to be in the short term and long term.

In this modern era of wealth management, it is typically considered wise to avoid financial planners who are predominately paid by virtue of commissions on the sale of any given product as this may indicate an emphasis on moving those pay-for-play programs over-focusing on what your specific financial needs may be. Fee-based structures have gained wide popularity of late and can take on a dizzying range of styles, from hourly to annually. Some fee-based advisors only get paid by a retainer and others charge an ongoing project rate. Make sure to discuss payment plan options that work comfortably within your budget with your advisor before you take any steps or sign any official papers.

Fiduciary is Fundamental

Financial planning companies and independent advisors that are held to a fiduciary standard are charged with acting on the investor’s best interest, even when it thwarts their own, at all times. There are serious legal consequences for failing to adhere to fiduciary standards once registering under that title. Finding a firm or representative with “fiduciary” plainly and publicly written into the official company policy or personal code of business ethics is absolutely mandatory to guarantee that you are never taken advantage of by the person you have chosen to manage your money.

“Are you a fiduciary company?” should be the first question you ask any wealth management representative you are considering. Other questions that are vital to ask of any financial planning advisor you are thinking of hiring include the following:


  • Does this financial planner handle insurance needs, such as life, health, disability, annuities or long-term care?
  • Can this financial planner help you plan your estate and financial bequests?
  • Is there a succession program in place at this financial planning firm in the event that this particular advisor leaves or something happens to him or her?
  • Can this financial planner track your investment cost basis for you?
  • Can this advisor help you file your taxes and address other tax-related concerns you may have?
  • What sort of client base is this financial planner accustomed to dealing with?

Knowing where you stand in relation to the financial advisor’s or firm’s typical clientele can lead you to a more comfortable relationship with your representative, which is invaluable when tackling sensitive money matters. Do not underestimate the power of personal vibes. Do you like this person? Do they understand your family‘s financial habits and needs? Synthesizing the answers to all of these questions will help you choose a financial planning advisor that makes the process easy, smooth and, at times, even fun.

Where do I look?

Do not be overwhelmed by the multitude of options available to you in the financial planning field. Start with friends, family members and other acquaintances in your life that you observe to have financial wellness or that you believe have connections to the financial planning world. This might be your lawyer, the accountant at your place of employment or a tax professional you have used in the past.

Search the web for glowing testimonials and referrals. If you have a retirement account with your workplace, then contact the office holding that account to see if anyone there can refer you to a wealth management company their office has done business with. You can also easily search for a financial planning advisor via the Financial Planning Association or the National Association of Personal Financial Advisors. Whatever avenue of discovery you take, remember to focus your financial planning choices around the specific and unique needs of your income, financial goals and family requirements for maximum success and minimal stress.


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