How to Find a Good Financial Advisor

Not Listed on AdvisorRating.com 

 

Step 1: Find Someone Who is Certified or Chartered

·     Click to find a Certified Financial Planner© (CFP©) by contacting the Certified Financial Planner Board of Standards.

·     Click to find a Chartered Financial Consultant (ChFC) from the American College.

·     Click to find a Certified Retirement Counselor® (CRC®) trained at the International Foundation for Retirement Education.

 

Step 2: Verify the Financial Advisor's certification(s)

Make sure the Financial Advisor’s certification(s) is legitimate.  For a listing of designations, click here.  Make sure the advisor you trust with your money knows what he/she is doing.

 

Step 3: Find a Professional Who Specializes

Focus your search on Financial Advisors whose specialty is with clients like you. If you are a young person still working and plotting your financial future, you may not want an advisor who manages retirees’ money.  If you are a retiree, you probably don’t want someone who specializes in working executives.

 

Step 4: Determine the Type of Advisor You Want.

Research what kind of service investment advisors, stockbrokers, financial planners, and insurance agents provide to determine which type of advice you need.

 

Step 5: Check Complaint History

  • Contact the Financial Industry Regulatory Authority (finra.org) to search an advisor’s name to determine if previous clients registered a complaint against them. 
  • Verify their credentials through your state’s Department of Securities or the Securities and Exchange Commission (sec.gov). 
  • Consider doing a criminal background check; convicted felons are allowed to have securities licenses. Many online companies provide this service for a modest fee. 

Step 6: Do a Background Check

Make sure your advisor does not have a felony record or civil litigation pending.  Check to see if any of their licenses have ever been revoked or suspended.

 

Step 7: Look For Red Flags

Beware of an adviser who has pat advice to offer before you’ve finished explaining your financial situation and goals. Determine if they offer the same product over and over to everyone they meet, or do they provide different solutions for different situations?

 

Step 8: Check Their Affiliations

Find out with whom your advisor associates.  Do they associate and work with other industry professionals?  Are they active in the local community?  They may just be visiting the area to pick up extra business, which could prevent a long-term relationship or proper support.

 

Step 9: Setup Interviews

Narrow your choices to a few advisors and call for an appointment -- most will meet with you for a free 30-minute introductory session.

 

Step 10: Go With Experience

Make sure the advisor has sufficient experience.  You can do this by verifying the date of their license(s).

 

Step 11: Determine If You Want a Product or a Plan

Before meeting, decide if you want a financial product that suits your needs or a financial plan for a period of time in your life. Different plans are available for beginning investors, college education, working families, and retirees.  This will also help you determine how you compensate your advisor -- with fees or commissions.

 

Step 12: Investigate Fees and Commissions

Before meeting, find out how the advisor is compensated. 

·    “Fee-only” planners charge a set rate for their services so there is no incentive for them to sell you more than you need.

·    Other planners collect commissions based on what they sell you so you only pay for the advice you act on.

 

Step 13: Ask About Availability

At your fact-finding meeting, ask how many times the planner foresees the two of you meeting to discuss your finances, and whether those meetings will be with the advisor or with an assistant.

 

Step 14: Be Comfortable -- Changes Are Coming

Make sure you understand and feel good about what will occur. There will be changes during the transition and you want an adviser with whom you are comfortable during this time.

 

AdvisorRating.com verifies most of the above items for Investors in advance.  However, there are many qualified Financial Advisors not listed on our website. The guidelines listed above can help any Investor make a smart decision about choosing a new Financial Advisor.

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