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Finding a Financial Advisor

This is part four in a series of articles for beginner investors. The first three parts covered why you should invest, types of investments and the importance of diversification. This article covers finding and hiring a financial advisor. When it comes to money management, it can feel as if there are two camps: The top hat…
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This is part four in a series of articles for beginner investors. The first three parts covered why you should invest, types of investments and the importance of diversification. This article covers finding and hiring a financial advisor.

When it comes to money management, it can feel as if there are two camps: The top hat and monocle-wearing uber-rich types who pay other people to worry about their money, and the rest of us who have to slog through money decisions on our own. Thankfully, nothing could be further from the truth. Every investor, no matter how modest the budget, can benefit from the help of a financial professional. And if you would rather clean your driveway with a toothbrush than make big money and investment decisions, help is available for you!

Types of Financial Advisors

Depending on your needs, there are several different professionals out there who can help you to reach your goals.

Financial Planners

For general money advice — including anything from investments and retirement to life insurance to savings to taxes to estate planning — a Certified Financial Planner (CFP) is your best bet. These financial jack-of-all-trades are a great resource for the average investor, as they can help you to get a good overall look at your entire financial picture.

Financial Planners will generally offer you a free first meeting, during which time you can ask questions about how they can help you reach your goals. From there, advice from the planner can either be charged hourly (a good idea if you have just a couple of specific questions), by the project (great for those who need help in only one area), or on retainer (for those who are looking for a long term relationship).

Although anyone can call himself a financial planner, a Certified Financial Planner is a title regulated by the CFP Board and those professionals must abide by standards of practice and a code of ethics.


This is the sort of money manager that most individuals think of when you mention getting investment help. Stockbrokers (also known as investment managers or wealth advisors) work to maintain the best possible returns for your investments.

In most cases, using a stockbroker is for relatively high rollers — those who have a portfolio of anywhere from $50,000 to more than $100,000. That’s partially because you will be paying around $100-$200 per stock trade, which is too rich for many casual investors’ blood.

If you are willing to do your own research, you can use the services of a discount broker — that is, someone who will do the trading for you at a lower fee than that of a full service broker. Discount brokers generally charge less than $10 for an individual online trade.


Sometimes, you need help in a very specific area. Want to figure out how to leave all your money to the whales? Want to know which 529 plan will be best for your kids? Want to figure out how to minimize your small business’s tax bill? In each of these cases, a generalist might be able to help you, but for the absolute best advice, find someone who specializes in the area where you need help.

It could be financially dangerous to simply hire anyone who has put out a shingle for services. This is where getting a reference from your CFP could be invaluable.

Research Financial Planners Before Hiring

It is always a good idea to do a background check or research an individual or company before hiring them to help you manage your money. The best place to start is by doing an online background check on the financial advisor, which you should be able to do for free with just a few minutes time. If you are satisfied with what you find online, then it’s a good idea to interview the financial planner to understand how they get paid, their investment philosophy, how they can help you, and whether or not you are comfortable with the individual or company. If something just doesn’t feel right, then don’t be afraid to look elsewhere.

How to Interview a Financial Advisor

After being do-it-yourself investors for more than 40 years, my recently-retired parents have decided they’re ready to seek professional help. Their conservative investing style has served them well, especially over the last few years. But they don’t like the idea of having to settle for pitifully low rates of return. They want to keep their money as safe as possible, but they’re coming around to the idea that they’ll have to branch out beyond certificates of deposit to generate enough additional income to maintain the lifestyle they want.

When they asked me how to find an excellent wealth management company, I recommended that they get referrals from friends or to contact reputable companies. I also told them to schedule a meeting with each prospective advisor and to ask him or her at least the following 8 questions:

Question No. 1: How long have you been in business?

Financial Advisor Meeting
Be sure to interview your financial advisor

Never assume an advisor’s age or fancy office equates to having experience in the industry. Find out when the financial firm got started, how many people are on staff, and exactly how long they’ve been working with clients.

Question No. 2: What services do you provide?

Don’t assume you know exactly what services an advisor or their company provides. Ask about specific services that you need, such as investment management, retirement planning, college planning, estate planning, or insurance analysis. It’s important that the advisor or firm’s expertise is a perfect match for you to get the best results.

Question No. 3: What licenses do you hold?

Find out whether the advisor is a Registered Investment Advisor (RIA), a stockbroker, or an insurance agent. Knowing an advisor’s designation tells you how he or she earns a living and what kind of products they’re likely to recommend.

Question No. 4: Who do you typically work with?

Before you give a potential advisor any information about yourself, ask them to describe their typical client in terms of age and portfolio value. It’s best to work with someone who has expertise working with people just like you.

Question No. 5: What is your investment philosophy?

Advisors should have a fundamental investing philosophy or approach that they’ve developed. Find out what it is, why they use it, how long they’ve used it, and if they can provide it in writing. Ask if all the advisors in the firm manage investments the same way or if they handle clients differently. It’s best to work with a company that has a unified methodology with a high-degree of collaboration among advisors, so your financial security doesn’t rest on the shoulders of just one person.

Question No. 6: How are you compensated?

It’s important to understand how an advisor charges clients. Would you have to pay commissions on product sales, flat fees, a percentage of your overall portfolio or all of them? Advisors can hold multiple financial licenses and therefore they can earn income in multiple ways, including perks from third parties and prizes for sales contests. It’s also important to note that many financial advisors don’t have a fiduciary duty to their clients and may recommend products which earn them the highest commissions.

Question No. 7: What additional costs would I have?

Find out if you’d have to come out-of-pocket to pay for expenses like account set-up fees, transfer fees, or maintenance fees. Get any additional charges disclosed to you in writing before you agree to use the advisor’s services. Also find out if you’d be required to sign a contract to retain the advisor’s services.

Question No. 8: How often do you provide account updates?

Find out how often you’d receive updates, phone calls, and statements from a financial advisor. If having up-to-the-minute information is important to you, ask if you would be able to check the status of your accounts online.

Do You Need a Financial Advisor?

It can be tough to know if you’re ready for a financial advisor. Many people wait until they have a major life change to call in the big dogs. There’s nothing like getting married, having a baby or changing a career to make you realize it’s time to get your finances in order. And there’s absolutely nothing wrong with that kind of timing.

If you ever feel like you don’t know what more you need to do in order to maximize your financial goals, then schedule a meeting with a pro then and there. It will help you to find a direction or give you the peace of mind to know that you really are on the right track.

Interviewing a financial planner and getting answers to the right questions will help you understand what an advisor can do for you and what they can’t. He or she should also ask you lots of questions and offer specific information about the services and typical results they provide for average clients.

It’s wise to interview at least two or three people so you have some means of comparison. You never know, they might even teach you something you didn’t know about what you should be looking for in a good advisor. If you don’t like a prospective advisor or their firm, simply thank them for their time and move on to the next candidate.

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About Emily Guy Birken

Emily Guy Birken Plutus Award-winning freelance writer in the financial sphere. Her varied career combined with her background in education helps her make complex financial topics relatable. She's also the co-author of Stacked and featured on the Stacking Benjamins podcast.

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  1. Rhianna Hawk says

    This is a really helpful guide on what to keep in mind when looking for a financial advisor. My workplace is looking into hiring a financial advisor to help out because none of us really have any experience in the financial field. I’ll be sure to make sure that my boss knows to look for someone who is an RIA or one of the others you mentioned so we get someone who has the right expertise.

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