How to Find the Best Financial Adviser

Megan Taylor
Sep 3, 2018 · 3 min read

Finding a financial adviser is nothing less than hiring a chief financial officer for your family. You look forward to work with someone for years using well-organized processes. Finding the right person or a good firm is a time-consuming task. You need to be sure that you have made the right choice when you hire a person or finalize on your decision of taking services of any financial advisory firm. We have listed down some points to help you make the best financial adviser.

Understand the different types of financial advisers

Not all financial advisers provide financial planning services along with investment management services. Some financial advisers are experts in retirement income planning while others are inclined towards wealth accumulation. You need to be clear about the type of financial advice you are particularly looking for. There are three main types of services that financial advisers offer. They are:

1. Financial Planning: It covers all the aspects of your financial life such as your savings, the insurance type you need etc. It does not solely cover investments.

2. Investment Advisory Service: It covers investment management functions focusing on which accounts should own what investments.

3. Retirement Income Planning: It is all about how you organize all the smithereens like Social Security, investments, taxes, pensions, retirement date, etc., in order to receive a retirement paycheck for life.

Reputation matters

When looking for a financial adviser, seek those with reputation credentials. Some organizations provide easily attainable credentials for a fee. But you should look for someone who has a CFP® (College for Professional training) or PFS (Personal Financial Specialist) designation, or an investment adviser who has a (CFA®) Chartered Financial Analyst certificate. These credentials are obtained by passing an examination which validates their proficiency. Advisers need to adhere to an ethics policy and meet ongoing education requirements in order to maintain their designation. An adviser who is a member of The National Association of Personal Financial Advisers can also be a good choice because this is a membership group of fee-only advisers requiring continuing education that goes beyond the required credentials.

Know how to compensate financial advisers

Financial advisers charge in different ways for their services. You need to be aware of all the potential ways in which a financial adviser may be compensated. These include charging an asset-based fee, charging an hourly rate, hourly fee or participating in commissions. It is a must that you should know and understand the difference between a fee-only adviser and a non-fee-only adviser. You cannot call any of the ways right or wrong, as it all depends on you and the adviser.

Ask questions before hiring

You can weed out financial advisers and get to the right one if you ask the right questions before hiring. Asking questions gives you an idea of how advisers communicate and their area of expertise. But, the key here is, you need to understand their answers. You can ask them about their ideal clients, how long have they been practicing, ask them to explain a concept to you, you can even ask them to explain to you how a potential financial adviser is compensated. But just make sure that you don’t ask questions you don’t understand.

While there are other things like verifying credentials, checking for complaints, and learning how to spot fraud risks which can help you find the best financial advisor, we suggest looking for those who have made it to the top financial adviser’s list on Financial Times like Michael Scott Schwartz. He is an entrepreneur and a certified financial planner from the American College. Based in Wellesley, MA, Schwartz holds a bachelor’s degree with majors in economics. He is the founder and CEO of Magnus Financial Group, LLC and has been recognized as the Top 400 financial advisers by Financial Times. He has also been recognized as a Wealth Management Advisor by America’s Premier Expert.