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How To Find A Financial Advisor

Tue Mar 2   sgreen   Uncategorized

How would you handle it if your doctor or attorney retired, or, worse yet, died? What if they decided to move to a completely different state making it hard to continue to see them?

These kinds of changes happen and they can be very difficult to deal with.

You need to find a replacement. Someone that is easy for you to work with. Someone you can get along with as well as someone who has your best interests in mind.

We tend to place a lot of trust in our closest advisors, especially when it comes to healthcare, legal matters, and our financial affairs. It is easy to take those relationships for granted until they disappear.

There are two basic steps to finding a financial advisor:

  1. Finding prospective advisors – This could be referrals from friends or family, finding an advisor online, or even via magazine or television.
  2. Interviewing financial advisors – You need to determine whether this person can satisfy your needs.


Advisor Chris Hilyer, of Heritage Wealth Management, says “Most people we talk with are concerned with two main things…Portfolio increases and follow-up from their advisor.”

An Overlooked Challenge

Depending upon whom you decide to work with, the structure of the firm can offer challenges.

For example, typically when you’re working with a bank or financial institution, the institution assigns you an advisor. If that advisor leaves, your accounts get reassigned. The expectation is that your relationship will be with the institution and not the advisor.

When dealing with financial consultants that are independent with licensed associates or partners, or affiliated with a broker-dealer, then typically the associates, partners, or broker-dealer assign a new financial consultant to your accounts. Again, you need to know who you are dealing with and what their experience level is.

If the financial advisor is a small independent advisor with no partners or licensed associates and not affiliated with a broker-dealer, then it is possible that there is not a succession plan in the event something happens. Here, your assets stay with the custodian but there is no advisor responsible for your accounts until you appoint a new financial consultant or transfer the account to a new financial advisor.

Whether you’re looking for an advisor or checking out a new one assigned to you, you need to treat it as if you’re hiring an employee. You need to feel good about their style of investing and how they do business. Specifically, you want to be looking at their investment strategy, the regularity of calls, texts, or emails to keep you in the loop.

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Finding the Best Advisor for Your Needs

Getting a recommendation from a friend or relative can help you build some confidence in making a  decision. At the very least, it can help you narrow down who to not choose.

You can also find an advisor by visiting the National Association of Personal Finance Advisors (NAPFA) website. You can search for advisors in your area or look up specific individuals.

Here are a few basic questions to ask every advisor you are interviewing:

  • What are the fees to manage assets? Are there any other fees that I should be aware of?
  • What is your investment philosophy?
  • Have you ever been cited by a professional or regulatory governing body for disciplinary reasons?
  • Do you provide both financial planning advice and manage investments?
  • Will you be working with me directly or will I be working with other associates?
  • How often do you provide checkups/reviews? How often should I expect to hear from you?
  • What is your succession plan?

Choosing the right advisor for you largely depends on your specific needs. Some people know exactly what they want, like, and need. Some people have no idea and are much more reliant on the recommendations of an advisor.

For the type of person, advisors tend to be more of a sounding board. They may be knowledgeable about what investments are good for them and may simply want someone to bounce ideas off or someone to help place trades.

If you are an investor who doesn’t know what they want or need, it is critical to have an advisor that you can trust. You should insist on having an advisor who follows a fiduciary standard. That means the advisor commits to putting your needs before their own.

Examine the advisor’s credentials. You want to look past standard academic achievements.

Before you do business, do a Google search of the advisor’s name and add a heading such as “legal actions” or “disciplinary hearings” to see if this person has had any formal problems. You can also check FINRA’s Broker Check for any disciplinary actions or other issues the advisor may have had previously.

A novice investor should typically also look for a fee-only advisor. Fee-only advisors are compensated the same regardless of what they recommend, and this may help better align their recommendations to that of their clients.. Fee-based and commission-based advisors can and do get paid dramatically different amounts, depending on the investments they choose for their clients.

Competence is also a crucial aspect of selecting an advisor. Advanced-education degrees and citations are a good start. For financial planning, does your candidate have a Certified Financial Planner (CFP) certification? For tax advice, how about Certified Public Accounting (CPA) expertise? For insurance and estate planning matters, has your advisor attained mastery as a Chartered Life Underwriter (CLU)? For retirement planning, has your advisor completed training as a Retirement Income Certified Professional (RICP)?

What professional services does your advisor offer to help make decisions about your investments? Some advisors have partners with experience in other areas as a way of providing additional advice.

A financial advisor who has a specific area of knowledge can be helpful when a specific question arises. This is one of the reasons firms with multiple advisors may be better for many investors.

Final Thoughts on Choosing the Best Advisor for You

It can be frustrating and even somewhat frightening when a long-time financial advisor leaves you. Whether they have retired, passed away, or been fired, it can put you in the uncomfortable position of having to choose a new advisor. Just like you wouldn’t take serious medical advice from a stranger or offer power of attorney to a shady individual, you don’t want to let an advisor you haven’t thoroughly vetted manage your investments.

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