How to Choose a Financial Advisor


One of the best ways to ensure your long term financial health, both personally and professionally, is to seek and heed the advice of a financial professional. Here’s what you need to know before choosing a financial advisor:

Decide on What Your Goals Are

One important step you should take before looking for a financial advisor, or even researching how to go about the process, is to decide your own personal financial goals. That is, decide what you want to get out of your financial advisor’s services.

Believe it or not, this decision-making process can not only help you better inform your financial planner – leading to greater chances of a positive outcome – but it will also play a role in helping you decide the kind of financial planner you will eventually select.

Decide on a Certified Financial Planner

Generally speaking, you should always look for a financial planner who is certified. This means that they have taken additional classes and tests needed to prove that they are truly the best of the best among financial planners.

Ask for a Referral

One great way to get in touch with a world-class financial planner is to ask people you know to refer you to someone who is competent and trustworthy. A great place to seek a referral is with someone in the financial field, such as your accountant at work.

Interview Several Planners

Don’t feel like you have to do business with the first financial planner or advisor you come across. Interview several and make sure to ask the following questions:

  • How are you paid? Be aware that those financial planners which charge a commission may be more likely to sell you products you don’t want or need. Be ready to ask them to explain their commission structure and see if they are paid when you buy a financial product, or only after you have made a profit.
  • Do you operate on a "fiduciary" structure? Financial planners which operate with a fiduciary structure are required to give you advice which suits your best interest. Anything other than "fiduciary" is probably best avoided.
  • Have you ever had any legal violations or disciplinary action taken against you? This question may seem direct and offensive but remember – it’s your money on the line. Ask the financial planner about their history, including if they have ever been the subject of any legal or disciplinary action. Follow the question up with a search of their license if possible.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Personal Finance , Banking and Loans , Basics , Retirement

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Joe Young

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