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Finding A Financial Advisor Checklist

Updated on August 16, 2014

Choose the Right Person For You!

When it comes to your hard earned money, you want absolute trust in the person or company that you will be going to for advice, that will be managing your assets, and will hopefully be with you for a long time. If you are young you should think of them as a potential long term friend because if you find a respectable and trustworthy financial advisor that you feel has your best interest at heart and has the same principles as yourself, you very well could be with them for 20-30 years.

One important trait you can and need to determine about yourself before you start your search, is to figure out what type of investor you are:

  1. Are you someone that wants complete control meaning you want to direct where money goes and your advisor is simply there to do what you need them to.
  2. Maybe you are the mutual effort type. You want to make some decisions and you want advice and some decisions to be made by your advisor.
  3. Perhaps you are the type of investor that wants to give the money to your advisor and let them do what they feel is best for you and your wealth.

1.) Referrals From Family and Friends

Getting referrals by talking with family, friends, and coworkers is one of the best ways to start your search for a financial planner. Most people have the same values as their family and usually associate with their friends because they have mutual qualities in common, making referrals from family and friends an extremely great place to start your search for a financial advisor. Even though a financial advisor may be highly recommended they still may not be a good fit for you, so it is important to still go through the rest of the checklist and do your own research to determine if that advisor would be the best for you.

  • Ask your friends, family, or coworkers why they like their advisor?
  • How long they have been with that advisor?
  • Is there anything they do not like about their advisor or the company the advisor works for?

These types of questions are important in helping you find a financial advisor that suits your personal financial needs. However keep in mind that just because a friend or family recommends someone that you have to use that person. They may be a fantastic, honest, and successful advisor, but if you do not feel comfortable with them then it is time to keep on searching.

2.) Would You Trust Your Children to Just Anyone?

If checking with family, friends, or coworkers is ultimately unsuccessful then it is time to start the search from scratch. First and foremost, hopefully you would treat your money like your children in that you would not enrust your money to just anyone. That money you worked so hard for could one day be helping your children pay for college, paying for a wedding, or used to take them on vacation. That is why doing your homework when choosing the person that will be managing your assets and how you want that money managed is vitally important!

To begin your search for a financial advisor there are many resources that can be found on the internet to help you find advisors located in your area. A great place to start is the National Association of Personal Financial Advisors.

Check to see what licenses, certifications, or other credentials they have, and ask them about their education. Just having the degree does not mean that they will be the best advisor for you.

What is a Certified Financial Planner?

3.) Be Strong in Staying with Financial Goals

Total commitment to your financial goals is necessary when trying to find an advisor that will be instrumental in helping you plan for your future.

When you set up your first meeting with your financial advisor come prepared. If you have followed the checklist so far, you either have been referred to this person and done your own research, or you have done the research to find this person. To adequately asses your potential advisor coming to the first meeting prepared requires a few essential documents (statements from any financial institution you have money with already and your most recent tax returns).

Also before the first meeting determining your own risk tolerance will allow you to compare your risk tolerance to that of the financial plan presented to you by an advisor,and there are several online resources that can help you with determining your risk tolerance. A good financial planner will help you with this when you meet with them, but again it is your money and if you are truly committed to your financial success then taking a few minutes on this should be no sweat.

Do all you can to protect your nest egg

Making sure that you and your family will be taken care of when you reach retirement age should be something you work hard to insure will be there when you need it.
Making sure that you and your family will be taken care of when you reach retirement age should be something you work hard to insure will be there when you need it. | Source

4.) Paying Your Advisor

Determining how you want to pay your advisor can be confusing, but hopefully these explanations will help in your search.

Commission - paid each time an advisor makes a trade for you with funds you provide. Fees can range from .02% - 6%.

Fee-based - A yearly fee charged that is determined by the amount of total assets a financial advisor has to manage for you. Fees range from 0.50% - 3%

Fee-only - charges by the hour for financial advice.

Don't Gamble With Your Money, Chose An Advisor You Can Trust


5.) Know what to expect from a good financial advisor

Educating yourself on what exactly a good financial advisor should be will help you to be prepared to compare a potential financial advisor against your personal list of qualifications, managing practices, and type of relationship you want with your financial advisor.

A good financial advisor:

- Should organize your financial information

- Provide you with statement of client's financial goals and risk tolerance.

- Will be able to provide written explanations on how funds will be managed

- Will be able to explain their fees in writing.

- Keep you informed of all aspects of your accounts (changes, performance)

- Be able to have assets transferred to their firm.

Do you have a financial advisor? If so how did you find them?

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6.) Keep in touch with your advisor!

A good advisor will keep in contact you with some regularity, however realize that they do have other clients and may not be available at that time. If you have any major questions, comments, or concerns by all means make the effort to get in touch with them. If they are hard to contact or seem to get harder and harder to get on the phone or get a sit down meeting with, then it could be time to start the search for a new advisor.


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