Financial Advisors

Choosing a Financial Advisor

* Taken from a SmartAssets article and edited with additions by Peter Kote – December 2021

Choosing a financial advisor is a major life decision that can determine your financial trajectory for years to come.
A 2020 Northwestern Mutual study found that 71% of U.S. adults admit their financial planning needs improvement. However, only 29% of Americans work with a financial advisor.
The value of working with a financial advisor varies by person and advisors are legally prohibited from promising returns, but research suggests people who work with a fee only fiduciary registered investment advisor feel more at ease about their finances and could end up with about 15% more money to spend in retirement.

  1. Hiring an Advisor Who Is Not a Fiduciary

By definition, a fiduciary is an individual who is ethically & legally bound to act in another person’s best interest. This obligation eliminates many conflict of interest concerns and makes an advisor’s advice more trustworthy.

If your advisor is not a fiduciary and constantly pushes investment products on you, you need a different professional and likely have a broker and not an advisor. Financial products that are commissioned based is not in your best interest.

  1. Hiring the First Advisor You Meet

While it’s tempting to hire the advisor closest to home or the first advisor in the yellow pages, this decision requires more time. Take the time to interview at least a few advisors before picking the best match for you.

  1. Choosing an Advisor with the Wrong Specialty

Some financial advisors specialize in retirement planning, while others are best for business owners or those with a high net worth. Some might be best for young professionals starting a family. Be sure to understand an advisor’s strengths and weaknesses – before signing the dotted line.  Remember most fee only advisors allow you to leave to another advisor without penalty of any sort.

  1. Picking an Advisor with an Incompatible Strategy

Each advisor has a unique strategy. Some advisors may suggest aggressive investments, while others are more conservative. If you prefer to go all in on stocks, an advisor that prefers bonds and index funds is not a great match for your style.

  1. Not Asking about Credentials

To give investment advice, financial advisors are required to pass the Series 65 test.  This is required if the financial advisor wants to charge a fee to give securities advice to residents in most states. You do not need any other licenses to act as an investment adviser representative. In fact, if a financial advisor does have other licenses be sure to ask why.

The Series 66 license are for advisors who want to have the Series 7 license.  The Series 7 allows a broker to sell commissioned based financial products to investors who rely on their registered representatives’ competence.  Ask your advisor about their licenses, tests, and credentials.  To learn more about licenses and the status of a professional license visit  BrokerCheck is a free tool to research the background and experience of financial brokers, advisers and firms.

The Series 7, and Series 65 or Series 66 are licenses and are not credentials. The entry level credential to be a financial advisor is the Certified Financial Planner, or CFP designation.

  1. Not Understanding How They are Paid

Some advisors are “fee only” and charge you a flat rate no matter what. Others charge a percentage of your assets under management. Some advisors are paid commissions by mutual funds, a serious conflict of interest. If the advisor earns more by ignoring your best interests, do not hire them.  “Fee-Only” is dramatically different than “Fee-Based” since this professional is likely to charge you both commissioned base products and fees.

  1. Trying to Hire an Advisor on Your Own

Chances are, there are several highly qualified financial advisors in your town. However, it can seem daunting to choose one.

Visit the web site for organization called NAPFA

The National Association of Personal Financial Advisors is the leading association of fee-only financial advisors.
Applicant Requirements

An applicant must have a Bachelor’s degree in any discipline from an accredited institution. Applicant must have a CFP® certification. Applicant must sign the NAPFA Fiduciary Oath. Once approved for membership, the applicant must earn 60 continuing education credits every two years.





The National Association of Personal Financial Advisors (NAPFA) has been promoting client-centered comprehensive financial planning.  This means that NAPFA members can counsel you about almost any issue, including those you have not considered.

Fee-Only compensation indicates that an advisor never accepts commissions or compensation of any kind related to the products he or she recommends.

– How to find an advisor :

– Advisor Search Tool :
– How to Choose a Financial Planner

– Ask First Form

– National Association of Fee Only Advisors – Questionnaire to use for choosing a new advisor

– Article : Why AUM Fees Still Make (Im) Perfect Sense



Selecting an Investment Advisor


In selecting an Investment Advisor it is important for you to know the legal relationship the person operates under; a professional broker – “suitability” versus a professional financial advisor “fiduciary” standard of care.

In our “It’s Your Money” workshop series we only use presenters who have a Fiduciary (“best interest”) duty of care to their present clients and do not have the “ability” (not licensed) to sell financial products.  Those who have presented at our workshops are listed below.  We suggest highly you meet with at least 3 professionals before you select any individual or firm.

In our workshops every presenter is required to complete the “ASK FIRST” form which discloses the individual’s licenses, credentials, how they get paid, education level, standard of professional care and if they are associated with anyone who sells financial product.  We believe one of the most important issues is for you to understand is HOW IS THE PERSON PAID One of the first things to do is to check out the individual on Finra’s broker check and to review how to select such a professional.

When asked about a financial advisor the most common question is about performance of the investment.  Performance is important but unless you understand the goals & objectives, risk tolerance, asset allocation, tax bracket, time horizon, etc. a number does not have much meaning.

So what does a fiduciary financial advisor/bono fide financial advisor, a professional that puts the client’s interests first and agrees that conflicts will be eliminated or discussed actually do?


The following is a list of professional functions under the umbrella of a Financial planner/advisor:


Retirement Plan Investment Advice
Helping Clients Identify & Achieve Goals
Ongoing Investment Management
Cash Flow/Budgets/Credit Issues
Charitable Giving – Trusts & Foundations
College/Education Planning
Estate & Generational Planning Issues
Insurance Related Issues, including Annuities
Alternative or Private Investments
Investment Advice without Ongoing Management
Real Estate Investments
Retirement Planning & Distribution Rules
Socially Responsible Investments
Tax Planning; Financial Psychology/Coaching
Advising on Cross Border Issues
Planning Issues for Business Owners
Planning Concerns for Corporate Executives
Divorce Planning
Advising Employee Benefit Plan Participants
Financial Issues Between Generations
Middle Income Client Needs
Newlyweds & Novice Investors
Advising Medical Professionals
Professional Athletes or Entertainersv
Special Needs Planning
Planning Issues for Unmarried & Same-Sex Couples
Women’s Financial Planning Issues
Hourly Financial Planning Services
High Net Worth Client Needs
Advising Entrepreneurs