We believe that when choosing a financial advisor you should consider the following attributes:
1. Choose a financial advisor that is also a Certified Financial Planner (CFP®). This is considered the premier designation in the financial industry. A financial planner with this designation has passed a 10 hour board certified exam, has 3 plus years of financial planning experience and has an undergraduate degree. The curriculum for a Certified Financial Planner is based on comprehensive financial planning including many disciplines such as: investment planning, retirement planning, tax planning, insurance planning, estate planning and college planning.
2. Seek a Registered Financial Advisor that operates under a Fiduciary Standard vs. the brokerage industry’s suitability laws. A Fiduciary Standard is the highest legal standard of care available in the industry. See our article regarding “What is a Fiduciary and Why Does it Matter” for more information.
3. You should seek a financial planner that is compensated in a fee-only manner vs. one who sells financial products, insurance or annuities for commissions. See our article titled “What is the difference between Fee-Only versus Fee-Based?”, for more information on financial advisor compensation systems.
4. Choose someone experienced with clients similar to your type of financial situation. Ask the advisor what their typical client is like, profession, total assets, life situation, advice needed, etc…
5. A financial advisor should be independent and not affiliated with any particular company or financial products. An independent financial planner has the ability to recommend what is in your best interest, not that which provides them with the highest commission.
6. Keep interviewing advisors until you find one that you feel you can trust. Hiring a financial advisor is a big decision and your financial future is at stake. Your relationship with your advisor should be based on trust and comfort.
7. Ask for a copy of your financial planner’s code of ethics to ensure their interests are the same as yours.
8. Beware of any promises made regarding performance or statements made regarding the ability to greatly outperform markets.
9. Ask your advisor if they are willing to put their fee structure, recommendations and any disclosures in writing. If not, that should raise a concern.