Three Questions to Consider When Looking for a Financial Advisor

Should I Rely on Consumer Reviews?

When searching for a financial advisor, many people begin by soliciting recommendations from their family, friends, and colleagues. It’s also a good idea to look at an advisor’s client testimonials and reviews online to get an idea of their track record and typical clientele. Past performance is never a guarantee of future performance, but advisors with many satisfied clients who have similar financial situations to yours may be better equipped to meet your advisory needs. Consumer reviews and personal recommendations can help you get a sense of an advisor’s work history and track record, but they should not be the only factor you consider when determining whether an advisor will be a good fit for you. 

What Traits Should I Look for in a Financial Advisor?

Experience Helping Clients Like You

Each person’s financial situation is unique, and different financial advisors have different service offerings. Think about what makes your finances unique and what areas of finance you most want help with. These factors should guide you in your search for a financial advisor. For example, if you are a high-net-worth business owner early in your career who needs guidance on how best to set up retirement plans for your employees, you want to find a financial advisor who has experience working with high-net-worth clients and business owners and offers retirement plan consulting. In contrast, if you are approaching retirement age and want to be sure you have enough saved to comfortably retire, you may want to work with an advisor who has guided numerous retirees in creating a sustainable retirement spending plan. 

Professional Qualifications

Financial advisors with relevant education and professional certifications have demonstrated their dedication to their profession and are equipped with the knowledge and skills to excel in their field. When evaluating prospective advisors, keep an eye out for advisors with professional qualifications that align with your needs, such as certified financial planners, certified exit planning advisors, and accredited investment fiduciaries.

Excellent Communication Skills

Your financial advisor should make you feel comfortable asking questions and sharing personal details about your finances and be someone who you can picture yourself working with long term. When meeting with prospective advisors, ask about their communication style, such as how often you can expect to meet with the advisor, how quickly they respond to questions, and how they prefer to communicate (e.g., phone, email, in-person meetings). You want to find an advisor who sets you at ease and with whom you can communicate effectively. 

Is It Smart to Select a Financial Advisor I Know Personally?

There are pros and cons to working with a financial advisor you know personally. One benefit is that you may feel more comfortable working with an advisor you already know. Communicating with them may feel easier than talking to a stranger about your finances, and you may already have an established trust. However, blurring personal and professional relationships also has the potential to cause increased discomfort for both parties should a disagreement arise. Additionally, the advisor you know may not specialize in the areas you need the most help with, and another advisor may be a better fit for your needs. When evaluating potential advisors, one candidate’s personal relationship with you should take a backseat to other more pressing factors, such as their experience, qualifications, and areas of focus.