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How to Find a Financial Advisor

Alexis O'Connell

Here’s the funny thing about your personal finances: you shouldn’t always keep them to yourself.

Getting professional guidance that is personally catered to your financial situation, no matter your age or income level, helps you stay motivated and on track to a stable fiscal future. If you’re not convinced, read these eight reasons why working with a financial pro is better than going it alone.

If you haven’t take action because you don’t know the first thing about how to find a financial advisor, this post is for you. We spoke with Tom Fisher, founder and principal of Fisher Financial Strategies in Cambridge, MA, to find out how to locate and what to look for in a quality financial planner.

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What to Look for in a Financial Advisor

“Financial advisor” can refer to a wide range of financial professionals. You’ll want to narrow down the list based on your personal preferences and circumstances. Consider these six criteria when seeking out and interviewing potential financial advisors.

1. Level of Asset Control

Fisher warns that not all advisors operate the same way. “Many advisors take custody of and invest your funds directly; others do not.  Many, but not all, will only work with clients who have a specified minimum net worth or income.” Clarify whether the advisor will be handling funds on your behalf or if they will exclusively provide financial advice, so that you end up with the services that you want.

When interviewing a potential advisor, Fisher advises asking if they are a fiduciary, meaning that they must act in your best interest.

2. Payment Structure

Ask potential advisors how they’re compensated. Some advisors are fee-only, while others receive commission. Fisher advocates working only with someone “who is willing to explain their compensation system in language you can understand, and with whom you are are comfortable.”

If a potential advisor skirts around the specifics of their payment process, search elsewhere.

3. Credentials

Fisher states that a common misconception is that all financial advisors have similar training. “There are, unfortunately, literally dozens of credentials that advisors can obtain, and some are more substantial than others.” He recommends finding someone with one or more of the following credentials: Certified Financial Planner ® (CFP), Chartered Financial Analyst ® (CFA) , or Chartered Life Underwriter ® (CLU).

4. Prior Client Experience

When interviewing a potential advisor, specify the kind of advice you want and ask whether they have worked with clients with similar financial situations in the past.  Experience with similar clientele is to your benefit.

Don’t know much about finances? Fisher says to “be sure to seek out someone who uses language that you can understand—who doesn’t ‘talk down’ to you.”

5. Accessibility and Longevity

The best client-advisor relationship are those “in which communication is clear, in which the client’s trust is always honored and his or her concerns are addressed satisfactorily, and in which the client feels that the services received are worth the fees paid,” Fisher says.

If you don’t feel as though the advisor you’re interviewing will return your calls, give honest feedback, and be responsive to your needs, they’re not the right choice. For a more concrete answer to the question of accessibility and longevity, Fisher states that you should “confirm that the advisor you’re dealing with intends to have a long-term relationship with you and that you will not be handed off to some other person after the initial meetings.”

6. Instinct

Relying on your gut is wise when it comes to choosing a financial advisor. “Instincts are usually pretty accurate; if you don’t feel comfortable with someone, he or she probably isn’t going to be a good fit for you.”

It’s essential to choose a financial advisor that you trust, so you can grow and secure your financial future with confidence.

There are a few preparatory steps you can take to streamline your search.

Get organized.

You’ll have a better idea of what kind of financial advice you’re looking for if your finances are in order. Organize yourself so that you’ll have solid information to work with in your advisor search and in your first appointment.

In addition, if you don’t have specific, written goals for your financial future, give some thought to what you want your money to accomplish. These intentions could impact what kind of advisor you seek out.

Get a recommendation.

Ask around! The personal recommendations of friends, family, and colleagues come with an added degree of confidence.

If you’re starting from scratch, Fisher recommends the Financial Planning Association and the National Association of Personal Financial Advisors, online sites with built-in search functions. Once you locate advisors in your area, Fisher suggests interviewing a few to get a feel for the right one.