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7 Step Process To Find The Best Financial Advisor

These Steps Will Help You Find The Best Financial Advisor


You want to make sure you hire the best financial advisor possible so before you hire a financial advisor, do your homework. Read through each of the steps below, conduct a search for advisors that meet your criteria, interview several, and verify their credentials and background before you hire them. Following these steps will help you hire the best financial advisor for you and your family.

1. Understand the Difference Between Financial Planning and Investment Management

Couple getting financial consult
Jose Luis Pelaez/ Iconica/ Getty Images
Some financial advisors offer financial planning services but not investment management; others manage investments, but provide little financial planning. To find the best financial advisor for your situation you need to understand the difference, and know which services a financial advisor provides before you hire them.

2. The Best Financial Advisors Have Credentials

All credentials are not alike. To find the best financial advisor, look for a financial advisor who has their CFP® or PFS designation, or an investment advisor who has their CFA®. And if you're near retirement, find someone with specialized training in this area, like an RMA or RICP.

3. Know How Financial Advisors Are Compensated

There are numerous ways financial advisors can charge, but in my opinion the best financial advisors are fee-only. To hire the best financial advisor you’ll need to know how all the ways a potential financial advisor may be compensated and you’ll want to understand the difference between a fee-only advisor and a fee based advisor.

4. Search Engines That Help

Here is a list of five search engines that allow you to put in specific criteria about the type of advisor you are looking for, such as their credentials, and method of compensation, and then search for the best financial advisors in your area who meet your criteria.

5. Ask These Questions Before You Hire

You can find the best financial advisor by asking these five questions when you interview advisors. These questions help you determine how the financial advisor communicates as well as their area of expertise and ideal client.

6. Verify Credentials

The best financial advisors have a clean compliance background and verifiable credentials. To be sure they are who they say they are always verify a potential advisor’s credentials and compliance (legal) background before you hire them.

7. Avoid Fraud - Only Use Advisors Who Do This

This is one of the simplest steps you can take to reduce the chance of fraud. The best financial advisors will use what is called a third party custodian to hold your assets. Here's what that means.

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