Finding a Financial Advisor

Do you already have a trusted financial advisor? Do you have a strong working relationship with him or her? It is important to feel like your advisor has your best interests in mind when dealing with your finances.

If you aren’t currently working with a financial advisor, we encourage you to consider doing so. While it can seem like an intimidating task, we’d like to help make it easier by providing you with some tips on what to look for in a financial advisor, what questions to ask, and where to begin finding one.

Get a referral. Turn to your friends, family, co-workers…anyone you can trust. Ask them how long they’ve been with their financial advisor and how they feel about him or her. Talk to two or three financial advisors before you sign up with just one.

Walk in with a plan. The best thing you can do before you begin meeting with potential financial advisors is to have a good understanding of what your financial goals and needs. Are you looking for a comprehensive financial plan, or do you really just need help building an investment portfolio? Answering that question will help you tailor your search for the right financial advisor.

Investment philosophy is important. How do they plan to help your savings grow? Ask your advisor to show you some examples of their investing/planning philosophies for people with financial goals and needs similar to yours.

Find our how your advisor gets paid. Don’t be afraid to ask the tough questions. Here are a few examples of compensation models for financial advisors.

Fee Only – Compensation is based entirely from consultation, plan development or investment management fees.
Commission Only – No fees for preparation of your financial plan; compensation based on the financial products that you purchase.
Combination of Fee & Commission – Fees charged for planning and development of your financial plan, and your advisor receives a commission based off of the investment products that your purchase.
Salary – Compensation is based solely on a salary provided by their financial services firm.

Point of Contact. Ask if you will be working directly with the advisor, or if you will be working with an associate from their office. It is not necessarily a bad thing to work with an associate, but make sure you know who your relationship will be with and make sure you meet the people you’ll be working with.

Look at their credentials. Professional designations don’t always guarantee a qualified and experienced financial advisor. You want to make sure you look for designations that have strict education and ethical requirements, such as:

Certified Financial Planner (CFP)
Certified Financial Analyst (CFA)

These designations don’t automatically mean the advisor does good work, but it does tell you that he or she has extensive training and experience.

And always remember… It’s a two-way street. Financial advisors can only create the most suitable plan for you if you share with him or her all of your financial needs and concerns.