Choosing a Financial Advisor


Choosing a financial planner is like choosing any other professional. You must do your homework and make sure the advisor’s personality is compatible with your own. His or her personal business philosophies should also be discussed to make sure they align with yours. Here are some questions to ask when choosing an advisor:


1. “What’s your professional and educational background?”
Don’t confuse this with experience, which many advisors will even do. The question is professional and educational background. How did they learn to be a financial planner? Did they read a book or get a formal education? Did they work in another profession before becoming a planner or is this what they have done their entire life?


2. “What’s your particular strength, your favorite area of personal finance, your investment philosophy?”
It’s important to know this. If your personal investment philosophy does not align, it could be a short relationship. Is their strength valuable to you as an investor or client?


3.  “Are you a registered investment advisor (RIA)?”
If so, ask for their Form ADV. This will tell you a lot about them. Part 1 discloses any lawsuits or arbitration proceedings the advisor has been involved in, as well as any disciplinary action against him or her by regulators. Part 2 discloses the advisor’s educational background, the type of services offered and how he or she is compensated. Registered independent advisors are required to provide part 2, but not part 1. It is a public document though, and you can obtain it from the SEC if the advisor chooses not to provide it. If they are an “registered investment advisor”, you can look them up on the SEC’s website.  RIA’s are fee-only and are not compensated by commissions.


4. “Are you registered with FINRA?”
Some advisors are dually registered with both the SEC and FINRA. However, most are only registered with FINRA. If so, they are paid primarily through commissions. You can look up an advisor on the FINRA website. Here, you will learn the advisor’s work history, broker/dealer affiliation and any client disputes, disciplinary or regulatory events. If there are any, the report will read, “Are there events disclosed about this broker? YES.  You must then click on Get Detailed Report to learn the details. This is a very handy tool to learn about your future advisor.


5. “How much experience do you have?”
Generally speaking, the more experience, the better. You probably do not want a rookie who will learn the trade on you!

6. “How do you charge?”
 If you have done your homework, you will already know this answer. Ask the question and get a fee schedule. Find out if there are any fixed fees for having an account or an IRA. These custodial fees are very common, but can vary greatly. Ask what percentage of the advisor’s income come from fees and commissions.


7. “Who is your broker-dealer?”
This is where your funds will be housed and the broker/dealer provides research, compliance, back office support, etc. So a reputable broker dealer is important.  Some independent RIAs will not have a broker/dealer.


8. Do you hold any professional designations?
This is important, as it displays the advisor’s commitment to their clients. Reputable designations are difficult to obtain and require additional continuing education. You will want an advisor who is constantly obtaining education. In our opinion, the two most recognized accreditations in the financial services industry are CERTIFIED FINANCIAL PLANNER™ (CFP®) and Personal Finance Specialist (PFS). For more information, please see and


If you would like our answers to these questions, please give us a call for our self published document, or better yet set an appointment to meet with us and discuss these questions and more. 


**Certified Financial Planner Board of Standards Inc. owns the certification marks CFP(R), CERTIFIED FINANCIAL PLANNER(tm) and federally registered CFP (with flame design) in the U.S., which awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.