How Do I Choose A Financial Planner?

You may be considering seeking some professional financial advice.  Or, if you already have a financial advisor, you may be wondering if they’re doing a good job for you.

You’re likely juggling 2 sets of questions as you consider this decision:

The first set is personal:

  • Do I like the advisor enough to spend significant amounts of time in their office?
  • Do I feel comfortable sharing all of my personal financial information, dreams, and goals?
  • Do I feel like the advisor understands and respects my lifestyle and goals and can help me achieve them?

With this first set, the answers are truly personal, and you should feel comfortable trusting your gut instinct after meeting the advisor and doing an initial interview.

Unfortunately, this is sometimes as far as selection process goes and the advisor choice is based exclusively on these personal connections.  This can lead to a lot of regret later on.

The second set of questions is fundamental and every bit as important as the first set.

  • Can I trust this person?
  • Are they competent?
  • Do I understand their fees and feel confident they’re a good value?

Answering these 3 fundamental questions requires some digging.

To determine the trust factor, I suggest interviewing the advisor using this Comprehensive Advisor Checklist.  In addition, you should receive a copy of their privacy policy and form ADV part II for Registered Investment Advisors.  You should also check their regulatory history to ensure it’s clean.  For Registered Investment Advisory firms, go to  For broker-dealer representatives, go to FINRA’s Broker Check.  It also doesn’t hurt to do a google search of the advisor.

To determine competence, you want to understand what education and experience they have in the financial areas important to your situation.  Be aware that many training programs provided by broker-dealer firms are essentially sales training programs, not financial planning programs.  You want to identify their specific financial planning education.  The Comprehensive Advisor Checklist also provides some very good guidance in this area.  In addition, you want to be sure they can explain their investing approach in clear, down-to-earth terms.  If it’s too complex to understand, at best it’s more complexity than you need.  At worst, you could be walking into a scam or sky-high fees that will seriously damage your returns.

Fees are the last area.  The Comprehensive Advisor Checklist also provides some solid guidance here.  The financial services industry is not known for transparency of fees, so you may have to be persistent to get the answers you need.  If the advisor is not forthcoming, you need to walk away.  Once you get the information, you will want to weigh any potential conflicts of interest in compensation model, the quality and customization of the advice to be received, and the scope of the advice (is it just investing or does it also cover other financial areas?).

Only after you’ve looked at both the personal and fundamental questions should you make a decision about who to work with.

About the author

Jean Keener, CRPC®, CFDP®

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