Personal Finance Advisors You Can Trust

5 Tips for Choosing a Financial Advisor You Can Trust

Updated on Mar 14 2019


Today, more than 40 percent of Americans use a financial advisor but many believe that their financial advisors act in the best interest of corporations, and not their clients. Here are key tips to help you choose a financial advisor you can trust.

Between 2010 and 2015, the percentage of Americans using financial advisors has doubled. This number will only continue to increase as the 21st century brings a myriad of financial challenges including a tricky market, changing retirement needs and more. The problem is that it can be challenging finding a financial advisor you can trust. In fact, a recent study by NARPP found that many Americans don’t feel their advisors necessarily act in their best interest.

Here are key tips to help you find a financial advisor that gives you financial peace of mind.

How do You Choose a Financial Advisor You Can Trust?

From monthly budgeting to long-term financial planning, a financial advisor can be a trusted partner helping you reach your financial goals. Helping you access investment accounts, keeping you on track, and acting as an educated sounding board, financial advisors can be invaluable - when you choose one you can trust.

Ask questions and do your research to find someone who help you conduct a financial assessment, set realistic goals, and work with you to maximize your investment potential. Here are five things to look for when choosing a personal financial advisor.

1. Core values

Understand the core values of your financial advisor and whether they match with your long-term financial goals. A person with integrity will be able to tell you his or her core values from a personal standpoint. Ask your friends and family about their financial advisors and choose a financial advisor with a good reputation, someone who has garnered trust over time throughout the community.

2. Compensation

Clarify how the financial advisor is being compensated for transactions so that you are not stuck paying a large bill for less than stellar service. Does your advisor have an annual fee? Do they expect payment on every transaction? Will they automatically take a percentage of every transaction? These are important questions to know the answers to upfront. Also, for tax purposes, clients should receive an annual accounting of how much they paid a financial advisor.

3. Communication

Be honest and upfront about how you would like to communicate with your financial advisor. Will you have monthly phone calls? Quarterly meetings? Not being kept apprised of your portfolio can be at the best annoying, and at the worst, criminal. Open communication is the best way to advance your portfolio but you will need to choose a financial advisor that communicates with you regularly.

4. Experience

When choosing a financial advisor, examine his or her education, experience, credentials, and advanced degrees. Notable financial certifications include Certified Financial Planner® (CFP), Certified Fund Specialist (CFS) and Chartered Investment Counselor (CIC). Do your research and confirm your financial advisor does not have a history of misconduct or pending investigations. It’s important to also do your due-diligence to find an advisor who is qualified to help with your specific financial needs as there are financial service professionals from varying backgrounds.

5. Trust

When it comes down to it, you have to decide if you trust your financial advisor to handle your financial assets. Ask your financial advisor if they are a fiduciary, meaning that they are legally and ethically required to put your interests first, even ahead of their own interests should those conflict.

Consider connecting with a fiduciary financial advisor today and have an honest conversation about your financial future. Do you research, ask the right questions and start a trusted relationship that helps you set and reach realistic goals for your future.

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