What to Look for in a Financial Adviser

We all want to reach retirement age confident we have the means to live a comfortable and enjoyable life, and choosing a financial adviser is one of our most critical decisions.

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Finding someone to take care of your money can be a stressful task. But you want to take your time to ensure you are selecting the right fit. What should you look for when choosing a financial adviser?

Here are a few questions to keep in mind as you seek an adviser to continue planning for retirement.

Are they a comprehensive planner?

When you first meet with a potential financial adviser, what advice are they offering you? Are they talking only about stocks and bonds? Or do they focus on other aspects of your finances like Social Security, taxes and estate planning?

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 A comprehensive financial planner (opens in new tab) will help you develop a holistic plan that looks at all aspects of your finances and covers your short-term and long-term goals. Advisers who use a holistic approach will take the time to ask you questions about your financial goals, both now and in the future. This could include everything from legacy planning to charitable giving. You want an adviser who truly understands your hopes for retirement. A holistic plan looks to optimize all aspects of your finances and how they can work together toward those goals. This type of planning will bring you a lot more value and help you navigate complicated financial decisions.

Are they a fiduciary?

A fiduciary (opens in new tab) is legally and ethically required to make the best decisions for their clients. They will always put your needs first. This may not be the case for many advisers out there. When choosing a financial adviser, you are looking for someone to help manage all of your finances. You want to be sure you can trust them to do that.

A fiduciary cannot recommend anything that does not benefit you. If a recommendation could lead to a potential conflict of interest for your adviser, as a fiduciary, they have to tell you. This could be something as simple as an adviser profiting more from one investment over another. When they are a fiduciary, you know that the recommendations they are giving you come from a place of trust, good faith and legal and ethical duty.

Are they an independent adviser?

An independent adviser is paid a flat fee to advise their clients, and they want to provide you more than a product. This is very different from advisers who work on commission. They make money based on their sales for a third party. Be wary of advisers who work on commission. Their recommendations may be based on sales and not the products or services that are best for you.

Advisers who work for larger firms may be allowed to offer only their firm’s specific products or services. Working with an independent adviser leaves you open to many more options for your money.

Are they a good personality fit for you?

Your values and goals should align with your financial adviser’s. When you leave an initial meeting, ask yourself if you got anything out of it. Your adviser should be able to make complicated financial subjects simple. You might meet someone who checks all of your strategic boxes, but if they aren’t a good fit for your personality – it’s OK to keep looking. This is an important decision, and you want to make the right one.

Enhance your financial future

A recent poll found that about 38% of Americans (opens in new tab) currently work with a financial adviser, and advisers are the most trusted place to get financial advice.

Planning your financial future is a process that takes years, and you don’t want to make any mistakes. Make sure you are working with the right people who make the best decisions for you and your money.

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 (opens in new tab) or with FINRA (opens in new tab).

Tony Drake, CFP®, Investment Advisor Representative
Founder & CEO, Drake and Associates

Tony Drake is a CERTIFIED FINANCIAL PLANNER™and the founder and CEO of Drake & Associates (opens in new tab) in Waukesha, Wis. Tony is an Investment Adviser Representative and has helped clients prepare for retirement for more than a decade. He hosts The Retirement Ready Radio Show on WTMJ Radio each week and is featured regularly on TV stations in Milwaukee. Tony is passionate about building strong relationships with his clients so he can help them build a strong plan for their retirement.