How Do I Find A Trustworthy Financial Advisor?

Some people like to work out on their own, some like to take group classes at the gym, and some prefer to exercise one-on-one with a personal trainer. The same goes for managing your money. If you decide you want some personal attention from a financial advisor, here’s what you need to know.

Financial Advisors Charge In Different Ways

Some advisors charge a percent of your assets under management, some earn commissions on the products they sell, and some charge an hourly fee. While the “percent of asset” advisor has the greatest incentive to make your account grow (the bigger your pile of assets, the larger the fee), these advisors often have minimum account sizes that put them out of reach for an investor who is just starting out. Meanwhile, advisors who earn a commission may be selling an excellent product—but they don’t have an incentive to warn you if that product isn’t a perfect fit for you. That’s why, when you are starting out, the type of advisor I like best is the last one, the hourly fee-based financial planner. In particular, I really like hourly fee-based financial planners who have earned the “CFP,” or Certified Financial Planner designation.

Talk To A Few Before Making A Final Decision

To find an hourly, fee-based certified financial planner in your area, you can go to NAPFA.org or GarrettPlanningNetwork.com. Simply put in your zip code and out will pop a list of potential advisors. I recommend that you interview two or three before making a decision. Key questions to ask include:

• How long have you been in the business and what kind of training do you have?
• How often do you like to meet with clients and what kind of financial information do you like to review with your clients?
• How much do you charge and how many hours do you think we’d need to work together to address my current issues?
• Can I talk to some of your existing clients?
• If you were in my shoes, what questions would you be asking right now?

Don’t Be Shy About Looking For The Perfect Match

Just as you wouldn’t think twice about seeking out just the right stylist or hair colorist, do not bat an eye at shopping around for just the right financial advisor. It’s in both of your interests for you to ask whatever questions you need to feel comfortable that you’ve found a perfect match.

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