6 Tips for Finding a Trustworthy Financial Advisor

Money Girl details 6 ways to find the best financial advisor for your situation and budget. Plus, she offers an assessment tool that makes it easy to rate and compare advisors, so you can pick the best one for your needs.

Laura Adams, MBA
6-minute read
Episode #397

Step #2: Consider Your Attitudes

Not all advisors have the same investing philosophy, so it's important that he or she can explain their investing style to you, and that you're in alignment with it.

The second step in finding the right advisor is to be mindful of your investment attitudes. Are you extremely conservative and feel uncomfortable taking any financial risk? Or does swinging for the fences, with the possibility of taking some losses along the way in order to make higher returns, seem natural to you?

Knowing your investing style can help eliminate the wrong advisers. Some prefer active investing, which is more aggressive and aims to beat average market returns in the short term. Other advisors believe in passive investing, which aims to mimic the market over the long term, by owning a highly diversified portfolio.

The bottom line is that not all advisors have the same investing philosophy - so it's important that he or she can explain their investing style to you, and that you're in alignment with it. 

Step #3: Request Proposals

Once you know what you want to achieve with your money, and how you feel about investing, it’s time to reach out to potential advisors.

Using a site like Wealthminder makes it incredibly easy to submit requests online and get free proposals from multiple advisors. According to its founder and CEO, Rich Ellinger, they:

  • Give prices as a flat fee with no hidden costs
  • Check the qualifications of every professional in their network
  • Guarantee satisfaction with every professional, or your money back
  • Work with fiduciary advisors only, which means they are professionals with a legal obligation to put your best interests first

You can also find fee-only advisors in your area by visiting the National Association of Personal Financial Advisors at NAPFA.org, or the Certified Financial Planner Board at CFP.net.

See also: Tips to Find the Right Financial Advisor

Step #4: Evaluate Proposals

Once you connect with a potential advisor, remember that looks can be deceiving. Factors like whether an advisor is old or young, or works independently or is part of a big firm don't tell you if he or she is competent.

Unlike other professions that require a degree, financial advisors don’t have to earn one. So look for designations such as Certified Financial Planner (CFP), Chartered Financial Analyst (CFA), and Chartered Financial Consultant (ChFC).

If you need tax or estate advice, consider using a Certified Public Accountant (CPA), tax accountant, or an estate attorney.


About the Author

Laura Adams, MBA

Laura Adams received an MBA from the University of Florida. She's an award-winning personal finance author, speaker, and consumer advocate who is a frequent, trusted source for the national media. Money-Smart Solopreneur: A Personal Finance System for Freelancers, Entrepreneurs, and Side-Hustlers is her newest title. Laura's previous book, Debt-Free Blueprint: How to Get Out of Debt and Build a Financial Life You Love, was an Amazon #1 New Release. Do you have a money question? Call the Money Girl listener line at 302-364-0308. Your question could be featured on the show.