How to Choose a Financial Adviser

To pick the right professional for you, you need to do some poking around and ask a lot of questions. Here are some practical steps to help make a solid decision.

(Image credit: Dimitri Otis aka Vervitsiotis)

A good financial adviser can teach you how to manage household expenses, save for the future and how to plan for retirement. Not everyone has the same financial goals, and a good adviser can help you plan for your future. You don't need to be rich to have a financial adviser. Almost anyone can benefit from the advice of a financial adviser, from recent college graduates to retired seniors.

Get some recommendations.

To find a reliable financial adviser, start by asking your social network. Chances are your peer group shares many of your financial concerns. Friends and family may also have some suggestions. Next you should research online for advisers in your area. A great place to start is the CFP board's website, Remember to research each adviser with an eye toward your own situation and goals.

Choose the right type of professional.

Compile a list of three or four potential advisers, and then look closer at each one. It might be a good idea to pick a financial adviser who is a Certified Financial Planner ™ professional (CFP®), Chartered Financial Analyst (CFA®) or Certified Investment Management Analyst® (CIMA®). Only a CFP® professional can call themselves a "Financial Planner," otherwise they are considered financial advisers. Someone with these certifications has completed specialized training and passed rigorous exams and is required to complete extensive continuing education.

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Do a background check.

Once you have discovered each adviser's qualifications, contact the certifying organizations to find out if there have been any complaints against each professional. If so, find out how the complaints were resolved. You can also request a list of satisfied clients who have goals comparable to yours and contact them to talk about their experiences.

Next, you should consider the adviser's area of expertise or their niche.

You should look for an adviser who specializes in your situation. For example, if you are nearing retirement, a potential adviser should have experience in that area. An adviser's success rate is another important criterion. During tough or stagnant economic times, experience will play a vital role. Has your adviser weathered previous economic slowdowns? Can they recommend a specific strategy for trying to minimize losses? How has that strategy worked in previous economic downturns?

Inquire about how your adviser is paid for services.

Most offer fee-based, hourly or commission-based services or a combination of two or three. A commission-based adviser typically suggests financial products that offer a professional commission only. While this can be OK for some investors, it could cause a conflict of interest. Some financial products are only available on a commissioned basis, however, so it's important to know why a particular product is right for you.

A fee-based adviser is paid a percentage of the assets that they manage for you and typically doesn't have a vested interest in recommending one financial product over another. An hourly based adviser doesn't manage money for you but rather gives advice on overall finances for an hourly fee.

Get together for some face time.

Once you have narrowed your prospects to two or three final candidates, schedule a meeting with each professional. During this consultation, communicate your goals honestly and clearly. Ask each adviser to write a plan for moving you from where you are to where you want to be. Get a written copy of this proposal, which should address your short-term and long-term goals, and suggestions on steps that you can take to achieve them.

Make your move.

Finally, choose the adviser's plan that makes the most sense to you, and with whom you feel most comfortable. Your goal is to have a long-term relationship with your adviser, so having a comfort level with them is very important.

Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. Reich Asset Management, LLC is not affiliated with Kestra IS or Kestra AS. The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney or tax adviser with regard to your individual situation.


This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

T. Eric Reich, CIMA®, CFP®, CLU®, ChFC®
President and Founder, Reich Asset Management, LLC

T. Eric Reich, President of Reich Asset Management, LLC, is a Certified Financial Planner™ professional, holds his Certified Investment Management Analyst certification, and holds Chartered Life Underwriter® and Chartered Financial Consultant® designations.