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How to Choose the Right Financial Adviser for You

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financial adviserSometimes, we all need a little help from an outside expert. A financial adviser can help you create the right plan for your money, as well as keep you on track.

However, you do have to be careful as you choose a financial adviser. Not every adviser has your best interests at heart. Before you commit your financial future into the hands of an adviser, it helps to do a little vetting first.

Can You Trust Your Financial Adviser?

Rose Swanger, MBA, CFP(r), and principal of Advise Finance, LLC points out that, too often, a financial “adviser” is little more than a salesperson. “My biggest pet peeve is that many people claim they have an adviser, only to find out those advisers are insurance agents,” she says.

Swanger, whose practice is in Tennessee, also points out that in many states an insurance license doesn’t even require a high school diploma. “So, how can anyone trust his or her finances with an insurance agent [doubling as a] financial adviser?”

Check into the situation, and make sure that your financial adviser is truly an adviser, with proper credentials. Find out what it takes to get licensed to sell insurance in your state, and be wary of any adviser whose main qualification is the ability to sell something.

One way to make sure that your adviser is ready to offer you the best advice for your situation is to check to see if he or she is being held, by law, to a fiduciary standard. A fiduciary has to put your financial wellbeing first, so that can be one of the best ways to go. Swanger suggests that you keep tabs, no matter how much you trust your adviser: “Hold him or her accountable, and consider a second opinion periodically to have a check and balance.”

And, of course, make sure you understand how he or she is paid. Watch out for someone who not only is paid on commissions, but also doesn’t have a fiduciary duty to you.

Choose an Adviser that Works Best for You

In addition to performing a background check, and making sure that potential candidates have the credentials you want, you also need to consider who works best for you.

Army Major Hank Coleman is a financial planner and owner of the site Money Q&A. He points out that you will have best results when your financial adviser understand your situation. “I’m in the military,” Coleman says, “so it’s important for me and other service members to find someone who knows a little bit about what it is like serving, and the unique situations that we have to deal with.”

Look into the background of your potential financial adviser, and find out whether or not he or she has special experience that speaks to your unique situation. “There cannot be a cookie-cutter approach,” Coleman says. “No matter what, clients need to find a financial adviser that understands their unique career path and socioeconomic situation in life.”

Don’t forget to interview potential candidates. You don’t need to go with the adviser you see first. Instead, you need to feel comfortable with that adviser. After checking the credentials, take a few minutes to find out about your adviser’s character, and determine whether or not you feel comfortable. In many cases, you might get an “off” feeling about the adviser. Realize that you are going to be sharing intimate financial information with this person. You have to feel comfortable with him or her.

Don’t be afraid to ask for a meeting for half an hour or an hour. Many financial advisers are willing to meet with you to get a quick feel for your situation, as well as to see if you suit. David Donhoff, Certified Mortgage Planner and Life Producer with Leverage Planners, LLC, has another piece of advice to consider as you choose a financial adviser. He thinks that you need to focus on character, and encourage the potential planner to share a little bit about him or herself: “The more you can have them talk…the more core character data you will have to make your own ‘personal fit’ decisions.”

(Photo: kenteegardin)

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