Broker Check

What to look for when hiring a Financial Advisor


Choice has a value: The value of flexibility that comes with having options. When looking for a financial advisor to work with, be sure they are an independent. Independent advisors have the flexibility to offer their clients the things they need. All too often I come across clients that have portfolios built around the needs of their former advisor broker/dealer. If your broker/dealer offers their own line up of investments and insurance products, there also presents itself a potential conflict of interest. Not only is the advisor an employee of the firm they may feel pressures or incentives to put their clients in those proprietary products of their firm. Advisors should be focused on their clients and not on the agendas of their firm. Consider independence.


The financial advisory business is about relationship just as much as its about financial management. No plan will work if you can’t trust and feel comfortable with the person you’ll be hiring to walk along side you and your family as you progress toward your financial goals. Interview your advisor, check his/her references, and follow your instincts. Don’t work with people you don’t like, regardless of how successful they may be or appear to be. Find an advisor with honesty, integrity, and transparency and let them earn your trust.

Compensation Structure

Make sure you understand how your advisor gets compensated. There are basically two structures common in the industry: commissions and fee for service. The commissions structure compensates the advisor on a transactional basis (buys, sells, etc.) The fee style of compensation pays the advisor based on an agreed upon percentage tied to the assets they manage. I believe that the fee structure puts the advisor and the client on the same side of the fence. If the assets they manage grow, the amount generated from the fee increases. If the value of the assets fall, the compensation paid to the advisor falls. The asset based fee also offers the most transparency of the two compensation structures. However, in the commissions structure even if the asset values are falling, as long as the transactions stay up, the compensation will stay level for the advisor. I believe this presents a conflict of interest.


The importance of working with an advisor who loves what they do is key. It is important in the initial meeting and thereafter to get a feel for whether or not the advisor is in the business to help or to simply push products. An advisor who truly cares about the things that are important to their clients are easy to spot. They go that extra mile. They excel in the little things. Do they call when they say they will? Do they followup and keep you informed in the progress of your financial goals and plans? All too often clients get pursued in the initial phase of the relationship only to later be left wondering if their advisor even remembers them or is up to date with what is going on in both their lives and finances. You don’t have to feel like you’re going it alone. Look for an advisor who enjoys being there every step of the way in your journey. It will make all the difference.


Qualification is paramount. What sets your advisor or potential advisor apart? Have they gone the extra mile to prepare themselves to be in a place that can offer you an edge. Look for a CERTIFIED FINANCIAL PLANNER™ professional. The CFP® designation is one of the most respected financial planning designations in the industry. My experience in the industry has shown me the value of good advice. There are a bunch of individuals out there using the titles of wealth manager or financial advisor. However, the designations they hold are the exact same held by normal stock brokers. What sets your advisor apart? If all you’re looking for is somebody to trade stocks and bonds for you, then you probably don’t need to look much further than a stock broker who is series 7 registered and may also hold their insurance license. However, if you want a planner who can intelligently discuss portfolio allocation, tax planning, estate planning, liability planning, insurance planning, and retirement planning, a CFP® professional can meet your needs. An individual who has earned the CFP® mark of distinction has met the education, examination, experience and ethics standards established by the Certified Financial Planners Board of Standards.

It’s your financial future… why settle?