How to Select a Financial Advisor That Fits Your Needs

Over the years, I have worked with many financial advisors, and I have also had the privilege of serving as a trusted financial advisor to my own clients.

When you are trying to build and protect wealth, having a financial advisor on your side can be beneficial. These relationships can change over time, and advisors can vary widely in the services they provide, how they are paid, how they communicate, and the legal standards they must follow.

You and your advisor should be on the same page. If that is no longer the case, you may still need professional help, but it could be worth considering whether a different advisor would serve you better.

Why the Right Advisor Relationship Matters

For people with substantial assets, financial decisions can become more complex. Retirement income, taxes, portfolio risk, and estate planning all play a role in determining how well an advisory relationship fits your needs.

Many American millionaires surveyed work with a financial advisor, trust financial advisors most for financial advice, and millionaires with an advisor say they expect to feel financially prepared for retirement.

The value of working with a financial advisor can differ from person to person. Advisors should not promise or guarantee investment returns. Still, studies have shown that clients working with a financial advisor may see an estimated 36% to 212% more dollar value in their portfolios over a lifetime, depending on a range of individual factors.

Before choosing a financial advisor, carefully weigh your investment goals, risk tolerance, and your own due diligence.

The main point is not simply to hire any advisor. It is to find one whose services, approach, and experience match your financial situation and long-term goals.

If you have been working with an advisor for some time and are thinking about making a change, the situations below may be reasons to ask more questions, get a second opinion, or look for someone else.

1. They Are Not a Fiduciary

A fiduciary financial advisor is legally required to act in a client’s best interest when providing advisory services. Fiduciaries must try to avoid conflicts when possible and disclose material conflicts so clients can make informed choices. Not every financial professional follows the same regulatory standards, so it is important to understand an advisor’s responsibilities before deciding to work with them.

You may want to look only for registered or chartered fiduciary advisors who are regulated in the United States.

2. They Dismiss Your Input

People hire a financial advisor to benefit from the advisor’s knowledge and experience.

Even when an adviser has discretionary authority, the account should still be managed in line with the agreed investment mandate, objectives, and restrictions.

If an advisor is unwilling to discuss your concerns or explain major decisions, that may be a sign to take a closer look at the relationship.

3. They’re Hard to Reach

A strong financial advisor will likely have many clients and stay busy. But being too busy to return calls or schedule regular check-ins can be a concern, especially when markets are volatile.

Your advisor should communicate with you in the way that was agreed upon at the start of the relationship and offer a reasonable path for questions or strategy changes.

Ongoing communication issues can make it harder to understand your plan or deal with time-sensitive planning needs. Review the service and communication expectations set at the beginning of the relationship.

4. They Don’t Give You the Details

Whether you are investing $50,000 or $500,000, you likely want to know how your investments are performing.

You should be able to get clear information about performance, fees, risks, and the strategy being used. If you repeatedly receive incomplete or confusing explanations, it may be time to ask more questions or seek a second opinion.

Likewise, giving you numbers without explaining what they mean can be just as problematic.

5. They Don’t Take Time to Know You

When providing personalized investment advice, an adviser should develop a reasonable understanding of your objectives and the circumstances relevant to the agreed scope of services.

Advice that does not appear to reflect those objectives may deserve further discussion or review.

How to Find a Vetted Fiduciary Financial Advisor

If any of these situations sound familiar, it may be time to look for a second opinion or find a new financial advisor.

There are likely several financial advisors in your area. With so many factors to consider, choosing one can feel overwhelming. Ask people you trust who they use and what their experience has been. You can also get referrals from professionals you know, such as your attorney, accountant, banker, or insurance advisor. Ask for references and make sure you feel comfortable with the advisor you choose.