How to Find a Good Financial Professional – or Dump a Bad One
Financial professionals can be invaluable on your journey to financial wellness. For the best experience, it’s important to find the right one for you.
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Just as you go to a mechanic to keep your car running smoothly and a doctor to keep healthy, seeing a financial professional can help ensure that you’re on the right track when it comes to your money.
Now, more than ever, financial professionals are an essential resource. And despite the rise in popularity of digital money management tools, human financial professionals are still the main source of financial advice. In fact, Prudential research shows (opens in new tab) more than half of the millennial population — known for being comfortable with digital technology — see themselves getting financial advice from a licensed professional, a number that rises to nearly two-thirds among millennial women.
Regardless of whether you’re just starting out on your financial journey or nearing retirement, getting professional advice can make a huge difference. But finding the right professional is not always as easy as it sounds.
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Lots of people — from your hairdresser to your stock-savvy neighbor — may like to offer financial advice, but it’s important to make sure you’re trusting your finances to an experienced professional who can help steer you in the right direction. There are thousands of well-qualified financial professionals out there. Here’s how to sort through them to find the best one for you (and how to get rid of one who’s not).
1. Know what type of professional you need
Deciding what your goals are will help you determine what kind of financial professional could be best suited to help you in your financial wellness journey. Some qualified financial professionals may have an alphabet soup of credentials after their names. The right one for you depends on the type of help you need. If you’re looking for a holistic financial plan — covering everything from saving for retirement to making sure you’re properly insured — you likely want to look for a CERTIFIED FINANCIAL PLANNER™ professional (CFP). There are also those who specialize in managing finances as they relate to everything from divorce (CDFA) to long-term care (CLTC).
Of course, there are qualified financial planners without those designations as well, and that’s where the next step comes in.
2. Do your homework
Hiring a financial professional may be one of the most important money decisions you ever make, so it’s worth it to spend some time making sure that you choose the right person. Start by asking friends and family members for recommendations of professionals with whom they’ve had a good experience.
List still coming up short? You can search for financial professionals, filtered by location and specialty, via various directories including the Financial Planning Association (opens in new tab).
3. Interview at least three candidates
Once you’ve got a few contenders, it’s time to schedule an introductory conversation. You’ll want to ask them basic information about how long they’ve been in business (and if they’ve been through a recession before), the size of their firm, their investing philosophy and whether they have experience working with clients like you. If you’re a small-business owner, for example, or a single parent, ask whether they have other clients in a similar financial situation.
This is also your opportunity to make sure you understand how each financial professional is paid. Some get paid a flat or hourly fee, while others earn a percentage of assets under management. Still others earn a commission for selling your certain products.
These interviews are as much about finding someone who checks all the necessary boxes for your financial needs as they are about finding someone with whom you feel comfortable. True financial advice can require talking about some extremely personal subjects, and if you don’t feel you can be totally honest with your adviser (and that they’re being honest back), they are not the right professional for you.
4. Keep in touch
While some financial professionals offer their services on a one-time project basis, most have an ongoing relationship with their clients. While you can probably check your portfolio and take care of basic money tasks online, you may also want to touch base occasionally with your financial professional.
You should expect to check in at least on an annual basis (either on the phone or face-to-face), but more often if there’s a big change to your financial picture or if you have money questions or concerns. A good financial professional is responsive when you reach out and can adapt their services as you hit financial milestones such as buying a house, having children or nearing retirement.
5. Remember, you’re not committing for life
Sometimes, even if you chose the right financial professional at one point in your life, they may no longer be well-suited to your needs years later. Or, perhaps you just made a mistake and chose the wrong adviser in the first place.
Regardless of the reason, if you ever start to feel uncomfortable with your financial professional — or have another reason to suspect that they’re no longer the best fit for you — it’s OK to move on.
Typically, you should line up your next financial professional (see steps 1-4) before severing ties with your current professional. That makes it easier to transfer your financial records and assets. You’ll need to let your current financial professional know that you’re leaving (a simple email should suffice), though you may also have to fill out some paperwork to officially end the relationship.
Finding the right financial professional requires some work, but connecting with the right person is one of the most important steps you can take on your financial wellness journey.
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.
Salene Hitchcock-Gear (opens in new tab) is president of Prudential Individual Life Insurance. She represents Prudential as a director on the Women Presidents’ Organization Advisory Board and also serves on the board of trustees of the American College of Financial Services. In addition, Hitchcock-Gear has a bachelor’s degree from the University of Michigan, a Juris Doctor degree from New York University School of Law, as well as FINRA Series 7 and 24 securities licenses. She is a member of the New York State Bar Association.