What should I look for in a financial advisor?

You probably want to start with a Certified Financial Planner (CFP).

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Does this person make your life better?

Does this person make your life easier?

Do you like this person?

“Financial Advisor” is not a regulated term and could apply to a variety of financial professionals. The examination requirement for Investment Adviser Representatives (IARs) is not particularly onerous. Registered Representatives and insurance agents have slightly more difficult examination requirements. However, the much more extensive education and examination requirement for CFPs can give you the confidence they have the knowledge to answer most of your financial questions.

The next step would be to find a CFP who has expertise and experience with your specific issues. Are you worried about student loan debt, career growth, retirement plans, kids college, buying a house, etc.? I have experience with stock options and equity compensation for employees. If you are concerned about your student loans or trying to plan the timing of when to take Social Security, I can answer some of the basic questions, but there is probably a better advisor out there for you. My wife and I both work and we have three kids in school. We’re neck deep in color coordinated calendars. I get it. But I haven’t lost a spouse and may have trouble empathizing with a widow or divorcee. I would happily recommend another advisor better suited to help with these issues.

The next is a series of questions to help understand how a relationship with that particular advisor would work. There is no right/wrong, good/bad answer, but the conversation should answer your questions to your satisfaction.

  • How do you make money? Are you paid in any other ways from anyone else?

  • What services do you provide for that compensation? (You could even ask for an example.)

  • Who will I be talking to most often? You or someone on your team?

  • Are you independent? Are you a fiduciary? Yes or no, how does that influence what you recommend?

  • What is the difference between fee and commission?

Finally, do you like this person? You will be spending many hours working with them. You will be sharing private financial details about your life you may never have told anyone else before. Would you enjoy meeting them and talking to them or will you dread having to drive to their office. You need to genuinely like the person as a person for the relationship to be worth it.

Would you like to ask me these questions? Want to learn more?

Check out my answers on Quora or contact me.

Aaron Agte, CFP®

Financial Advisor