How to find a financial advisor you can trust? When it comes to your personal finances, you want to make sure you’re working with someone you can trust. After all, this is your hard-earned money we’re talking about!
#10 ways to find a financial advisor you can trust
How do you go about find a financial advisor you can trust? Here are 10 tips to get you started:
- Do your research
- Ask around for recommendations
- Check their licensing and qualifications
- Review their fees and investment philosophy
- Ask them questions about their process and how they would handle specific scenarios
- Get a feel for their personality and whether you think you could work well together
- Check out customer reviews online
- Meet in person if possible
- Watch out for red flags
- Sign a contract or advisory agreement
1. Look for an advisor with the certified financial planner (CFP) designation.
When looking for a financial advisor, it’s important to find one who you trust and feel comfortable working with. One way to find a qualified advisor is to look for one who has the Certified Financial Planner (CFP) designation.
CFPs are required to meet rigorous standards, including completing financial planning courses and passing a comprehensive exam.
They must also adhere to a strict code of ethics, which ensures that they will always put their clients’ best interests first.
2. Find an advisor who is a fiduciary
When you are find a financial advisor you can trust, it’s important to find one who is a fiduciary. This means that they are legally obligated to act in your best interests, and not their own.
Some advisors may try to skirt this responsibility by calling themselves “advisors,” but not being a fiduciary. You can protect yourself by asking your advisor if they are a fiduciary, and if they are not, consider finding another one.
3. Check an advisor’s background and credentials
When you’re looking for a financial advisor, it’s important to check their background and credentials. After all, you’re entrusting this person with your hard-earned money, so you want to be sure that they’re qualified to help you reach your financial goals.
Some things you may want to look for find a financial advisor you can trust:
- Are they licensed and registered with the SEC or FINRA?
- Do they have any professional certifications?
- Do they have experience in the type of investing you’re interested in?
- Do they have a good track record?
- What is their fee structure?
- Are they a fiduciary?
- Do they have any complaints filed against them with the Better Business Bureau or any other consumer protection organization?
By doing your research and asking the right questions, you can find a financial advisor who you can trust to help you achieve your financial dreams.
4. Make sure an advisor has experience with clients like you.
One of the most important things to “find a financial advisor you can trust” is their experience with clients like you.
Not all advisors are created equal, and some may have more experience working with high-net-worth individuals or retirees than they do with young professionals or recent graduates.
Make sure to ask an advisor about their experience with clients in your same stage of life. That way, you can be sure that they understand your unique needs and can provide sound advice tailored specifically to you.
5. Find an advisor who charges a flat fee or a percentage of assets under management.
One way to find a financial advisor you can trust is to look for one who charges a flat fee or a percentage of assets under management. This way, you’ll know exactly what you’re paying for and you won’t be surprised by any additional fees.
It’s also important to make sure that your advisor is licensed and insured, so you’re protected in case of any unfortunate events.
6. Avoid advisors who earn commissions from selling products.
When looking for find a financial advisor you can trust, it’s important to find someone you can trust. Unfortunately, there are many advisors out there who are more interested in earning commissions from selling products than helping their clients achieve their financial goals.
To avoid these advisors, be sure to ask about their compensation model. Advisors who earn commissions from selling products will likely be less interested in helping you find the right solutions for your unique situation.
Instead, they’ll be more focused on selling you products that may or may not be right for you.
7. Look for an advisor who has a good understanding of tax law.
When looking for find a financial advisor you can trust, it’s important to find someone who has a good understanding of tax law.
Advisors who are well-versed in tax code can help you save money on your taxes each year, which can add up to thousands of dollars over time.
Look for an advisor who is up-to-date on the latest tax laws and ask them about their experience with helping clients save money on their taxes.
They should be able to provide you with examples of how they’ve helped other clients in the past.
8. Find an advisor who uses independent research
One of the best ways to find a financial advisor you can trust is to look for one who uses independent research. This means that they don’t rely on the products or services of a single company or investment firm, and they have access to a wide range of unbiased information.
This allows them to give you sound, impartial advice that’s in your best interests, rather than pushing their own agenda.
So if you’re looking for someone to help you manage your money, be sure to ask if they use independent research.
9. Ask about an advisor’s investment philosophy
When looking for find a financial advisor you can trust, it’s important to ask about their investment philosophy.
Do they believe in long-term investing, or do they focus on short-term gains? Do they believe in minimizing risk, or are they more aggressive with their investments? Knowing an advisor’s investment philosophy will give you a good idea of whether or not they’re a good fit for you.
10 Get a second opinion
No one knows your financial situation quite like you do, so it’s important to take the time to find a financial advisor you can trust. If you don’t feel comfortable with the advisor you’ve chosen, don’t be afraid to get a second opinion. There’s no harm in getting multiple opinions until you find one that you feel comfortable with.
- Ask friends and family for recommendations
- Check with the National Association of Personal Financial Advisors (NAPFA)
- Consider a fiduciary financial advisor
- Review an advisor’s licensing and certifications
- Ask about the advisor’s investment philosophy
- Examine the advisor’s fees
- Get references and check them
- Investigate the advisor’s disciplinary history
- Review the advisor’s financial stability
- Get a complimentary consultation