How to Choose a Financial Advisor

Choosing the right financial advisor just got a little easier with these three helpful tips. 

What if choosing a financial advisor was like finding your dream home? It could be if you knew all the things you were looking for and allowed yourself some extra time to shop around.  

Choosing the right financial advisor shouldn’t be a sprint. This should be a decision you can take your time with that doesn’t come with pressure or an expiration date. This is a relationship you could potentially have for decades, if not generations.  

Financial planning and money management are ultimately about fulfilling your life goals. In an ideal world, you would find a financial advisor who views money as a means to an end and not the end in and of itself.  Someone who knows how to put your money to work for you and is driven to work even harder because of the future you’re working towards, not just returns on a spreadsheet.  

Here are 3 Things to Consider When Choosing a Financial Advisor 

1. Expertise. Nothing quite replaces experience when it comes to financial advice. The more education, time in practice, and credentials, the more knowledge they have. Time is knowledge and it’s OK to look for some of that when you are considering working with a financial advisor. Keep in mind that newer financial advisors may have a different set of expertise that you value equally. Newer advisors may embrace technology more and use systems and processes that make your finances even more accessible and convenient for you. Expertise comes in different forms, so just know what is most important to you so you can decide accordingly. 
   
2. Fiduciary. The fiduciary standard is a real thing and it is defined by CFP Board as, “requiring that a financial adviser act solely in the client’s best interest when offering personalized financial advice.” It further states that, “Under federal law, in particular the Investment Advisers Act of 1940, investment advisers are regulated by the Securities and Exchange Commission (SEC) or appropriate state authorities and are required to provide services to their customers under the fiduciary standard. CERTIFIED FINANCIAL PLANNER™ professionals providing financial planning services also must abide by the fiduciary standard, as defined by CFP Board.” 
   
3. Approach. How a financial approaches your financial care is of the utmost importance. What sort of approach does the advisor take to advising/management/planning? Is he going to offer you actionable steps you can take to reach your goals or simply invest your money for you? Often times, the value a financial advisor can bring to your relationship with him or her is their ability to hold you accountable. They can hold you accountable to your financial plan and advise you on lifestyle choices that empower you to make smarter financial decisions that align with your financial goals.  

 
Once you get to the point where you feel ready to make a decision, do one more gut check to make sure.  Take note of how you feel around them- do they put you at ease? Do they help you envision your future and how you’re going to get there? Go with your gut, since it's usually right. If something feels off, walk away. And if everything feels right, go for it!

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Tyle Landes is the founder of Tandem Financial Guidance, a fee-only financial planning firm in Kansas City, Missouri. Tyler and I became friends after meeting at XY Planning Network and I asked him to write some thoughts on finding a planner as a guest topic for this site.