Seven Smart Ways to Find a Financial Advisor For Your Needs

Written by Lindsay Mayhall on July 27, 2022

In the past, choosing the right financial advisor wasn't on the mind of many professionals. After all, if you're young and just getting started in your career as an up-and-coming professional, you most likely don't have much in your retirement accounts or bank accounts to care about. However, as you get older and more things enter your life — whether that be marriage, children, buying a home, taking a vacation — it's important to start thinking about how to plan for the future and what will happen to your finances.

Ask for a referral.

 "The number one thing is to ask for a referral," says Carrie Schwab-Pomerantz, president of Charles Schwab Foundation. "Ask your friends and family who they use."

If you don't know anyone who has used a financial advisor, call the National Association of Personal Financial Advisors (NAPFA). This group represents fee-only financial advisors who are held to a fiduciary standard, meaning they have a legal obligation to put their client's interests first.

Determine whether the advisor is in your state. “It's important to check that they're licensed in your state before signing on with them,” says Schwab-Pomerantz.

Get references from friends and family members if possible, but also check out their credentials and background on the Financial Industry Regulatory Authority (FINRA) BrokerCheck website or the Investment Adviser Public Disclosure website to make sure they're not on any hot lists or have been disciplined by regulators for dangerous behavior such as fraud or taking advantage of elderly clients.

Listen for buzzwords.

One of the best ways to learn about an advisor's background is by listening to their language. Financial professionals use specific terms that only make sense to those in the industry. For example, if your advisor says they're "fee-based," they're likely an independent fee-only planner who charges a flat-fee or hourly rate rather than commissions or sales charges. If they say they're "registered investment advisors," that means they've taken additional steps to become registered with the Securities and Exchange Commission (SEC).

Ask for references. If you haven't already spoken with several people who are happy with their advisor, ask for some names and numbers before starting your search. That way, when you call them up, you'll have a good idea if this person is worth your time or not. You can also ask what services they provide — whether it's retirement planning, estate planning or investment management — so that you can determine if their services align with yours needs.

Review the advisor's education and experience.

 You're busy, and you need financial advice. So how do you find the best financial advisor for you?

One way to start: Review the advisor's education and experience.

"The most important thing to consider is whether or not [the advisor] has a CFP (certified financial planner) designation," said Julie R. Ross, a certified public accountant and author of "A Woman's Guide to Successful Financial Planning." "It means they have passed an exam, have met certain educational requirements and have been trained in various areas of personal finance."

The CFP is not a license or a certification — it's more like an advanced degree in finance that requires passing two exams and meeting other requirements set by the Certified Financial Planner Board of Standards Inc., which administers the test and oversees the credential.

Find out about the advisor's services and fees.

 You don't need to be a financial expert to find a great financial advisor. You just need to know what questions to ask. 

Financial advisors provide many different types of services, from portfolio management and investment advice to retirement planning and estate planning. Some advisors charge an hourly rate or a flat fee for their time, while others charge a percentage of your assets under management (AUM). Ask about any additional fees that might be charged for services such as estate planning.

Ask about their qualifications. Financial advisors must have at least $100,000 in assets under management as well as experience working with clients' assets. The Securities & Exchange Commission requires all registered investment advisors (RIAs) to disclose their qualifications clearly on their websites or in other documents they give you when you meet them in person. Make sure that the advisor has the credentials you need — especially if you're looking for someone who can help manage your portfolio after retirement or plan for long-term care expenses later in life.

Ask about how they make money and whether they're paid by commission or fee-only compensation.  RIAs usually earn their revenue through a management fee consisting of a percentage of assets held for a client.

Determine if the advisor has a fiduciary responsibility to you.

 The best financial advisors are the ones who have your best interests at heart. But how can you tell if they're truly committed to your goals?

It's important to ask whether an advisor has a fiduciary responsibility to you. Advisors who are fiduciaries put their clients' needs first and legally must act in their clients' best interests, rather than in their own interest or on behalf of any third party.

A fiduciary is required by law to provide advice that serves your specific needs and objectives — not just what's beneficial for them. If a broker recommends investments based on his or her own personal preferences and profits instead of yours, there could be serious consequences down the line. For example, a broker might sell you high-commission products instead of cheaper ones with comparable returns because he or she stands to make more money from commissions and fees associated with those products.

Check to see if the advisor has a history of disciplinary action or bankruptcy.

 The best financial advisors are not just good at investing. They're also good at knowing who their clients are, providing them with a detailed financial plan and building relationships that last. However, finding the right advisor for your needs can be difficult.

Check to see if the advisor has a history of disciplinary action or bankruptcy. The Securities and Exchange Commission (SEC) maintains a database of past disciplinary actions against investment professionals at You can also check the Financial Industry Regulatory Authority's BrokerCheck database at This database includes information about any customer complaints or lawsuits against an individual and any regulatory actions taken against him or her by FINRA or other regulators such as the SEC or state securities authorities.

Ask about credentials, designations or specialties.

Financial advisors have different training and licenses depending on what they do (e.g., sell insurance products versus manage investment accounts). Ask which areas interest you most and what kind of training the advisor has had in those areas.

Find out how many years the advisor has been in business. A new advisor may be eager to build his or her client base, but having experience is important too — especially if this person will be managing your money for many years to come.

Check references from former clients (and other professionals) before meeting with a prospective advisor in person. You want someone who has experience working with clients like you — someone who is dedicated to your financial needs.

Takeaway: It is important to do your research before choosing a financial advisor.

Like any other service you hire, look into the background of your financial advisor and let that inform your final decision. This can determine who you choose to trust with your money, and that is an important choice to make. In today's world, there are many options in terms of where to invest. Many advisors have realized this, and they are currently doing their best to gain your business by offering a wide variety of services based on what you need. It is up to you to analyze those differences, but keep in mind that the overarching goal for any professional has to be providing their customers with a great value.