Broker Check

Choosing a Financial Advisor

When choosing a financial advisor, we feel the following questions may be helpful in guiding our clients and potential clients:

  • What is your educational background? As with any other professional, you should expect your advisor to have a college degree.

  • Which financial planning designation do you have? Look for an advisor who has earned one of the few prestigious licenses: Certified Financial Planner (CFP), Chartered Financial Consultant (ChFC), Chartered Financial Analyst (CFA) or Personal Financial Specialist (PFS). All of these advisors are bound to a code of ethics and are subject to continuing education requirements.

  • How long have you been in the business? In general, seek an advisor who has been in business for a minimum of 10 years.

  • What licenses do you hold? An advisor who has a Series 7 securities license is registered with the Financial Industry Regulatory Authority (FINRA) and is able to sell a wide variety of investments. One who holds a life insurance license can also sell various insurance and annuity products. A Registered Investment Advisor (RIA) is registered with either the state of the Securities and Exchange Commission to provide financial advice on a fee basis.

  • What products and services can you provide? Avoid “captive” advisors who are limited in the products they can sell.

  • In which areas do you specialize? Nobody can be an expert at everything. Do you need an advisor to manage an individual stock portfolio, or one who focuses on estate planning issues?

  • How do you get paid? There is no right or wrong answer to this question. What you are looking for is an advisor who will openly explain to you whether their compensation comes from selling products (commissions) or charging fees or some combination. An advisor should be able to offer both choices, and let the client decide which method is best for them.

  • What other activities and organizations are you involved with? Look for an advisor who is active in the local community. These people tend to have strong roots, and are often less likely to pick up and move away.

  • What type of information does the advisor request of you? Before making any judgments or recommendations, an advisor needs to know a number of things about you: what are your financial goals, both short-term and long term? What does your present financial situation look like? What is your tax situation? What has been your investment experience?

  • Finally, select an advisor with whom you feel comfortable. If all goes well, you will have a long relationship together, and working with someone you like will help cement the relationship.