Financial advisors seem to be everywhere, so how do you find the one that's right for you?
Despite how confusing it can feel to source and select a financial advisor, there are a few ways you can start your search and find the right one for you and your family. At the end of the day, your financial advisor is someone who will help you reach your financial goals and provide you with the tools and resources to secure the future you’re working towards.
Here are four ways to start your search for a financial advisor and choose the one that is right for you.
Ask someone who is doing well financially.
Do you know someone who seems to have it altogether financially? Perhaps a friend or family member appears financially secure and is able to live a life very close to the way you are or would like to be living yours. Ask them if they use a financial advisor and, if so, who.
While financial advisors can’t guarantee performance and legal regulations prevent clients from sharing testimonials about their experience with a financial advisor, you can observe how a financial advisor may be working in someone else’s life. Getting a referral for a financial advisor from someone you trust is a really great way to begin searching for the right financial advisor for you.
Do your research.
Beyond getting a referral to a financial advisor from someone you trust, don’t forget to do your research as well. Just Googling someone’s name can provide a lot more information than you were previously able to acquire even a decade ago. Check out a financial advisor’s internet presence if he or she has one. Not everyone is going to be a social media darling, but it is worth looking into to see what you may find.
A couple of other great website to conduct research on your potential financial advisor is through the Financial Planning Association (FPA) and National Association of Personal Financial Advisors (NAPFA). These resources will provide more details about a financial advisor’s level of expertise, education, any specialties, years of practice, and credentials. You will find fee-only financial advisors on these sites.
Know what you’re looking for.
Have an idea of what you are looking for in a financial advisor. What is it you really want them to be able to help you with and what type of professional and person do you want working closely with you on your finances? It’s recommended that you have even a simple list to help keep you focused. Because there are so many financial advisors to choose from, the more specific you are with your needs, the easier it will be for you to filter out ones that don’t offer the expertise you’re looking for.
For example, if you want a financial advisor that is well-rounded and offers a host of services that cover a wider range of financial topics, a Certified Financial Planners (CFP) is one requirement you may have. These financial advisors have demonstrated competency in every single area of financial planning (there are over 100 subject areas they have to study!). They know about stocks, taxes, estate planning and many other facets of finance that allows them to draw from an impressive level of expertise to draw up your financial plan.
Meet face to face (if at all possible).
Lastly, never undervalue the power of a face-to-face meeting. Credentials matter, but so does personality. A website will never be enough to let you know how it feels to work with someone individually (although advisor websites are getting much better!) Even if your potential financial advisor is in a different state, have a meeting over videoconference so you can see each other and see how overall communication looks and feels. This is the person who will be intimately involved with your finances and who will offer advice and accountability so you can reach your financial goals.
If communication is good, you will feel better about the relationship and so will they. It means your relationship will be able to grow over time and they will be able to tell you what you need to hear in a way that allows you to make smarter financial decisions.
In conclusion.
With the right credentials, the right experience and a winning style of communication, your financial advisor can help you define your financial goals and help you achieve financial independence. Choosing the right financial advisor for this job may be a little easier if you follow the steps we outlined here. Good luck!
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Charles Donalies is the founder of Donalies Financial Planning, a fee-only financial planning firm located in Washington, D.C. Charles and I became friends after meeting at and I asked him to write some thoughts on as a guest topic for this site. Charles and I became friends after meeting through the XY Planning Network, and I asked him to write some thoughts on choosing a financial advisor as a guest topic for this site. |
Chuck Donalies | Donalies Financial Planning