To find a financial advisor that can best meet your needs, create a plan that will help you gather the information you need to make an informed choice.
Doing a quick internet search is an easy way to find a financial advisor. So is asking for a recommendation from a family member or friend. However, “easy” is not the same as “best.”
Working with a financial advisor entails sharing private details of your life, including your personal finances and your plans for the future. It requires a high-level of trust, as you’ll expect your financial advisor to provide objective, unbiased guidance regarding your hard-earned money — and your short- and long-term financial goals.
You’re also unique. Your comfort level with managing your finances, your communication style, your interest in and knowledge of financial trends, your plans for the future, and other variables make your situation different from that of anyone else.
Simply put, choosing a financial advisor is a highly personal matter.
Your Financial Advisor Search Plan
While no single strategy is best for everyone, the tips that follow can help you make an informed decision when choosing a financial advisor. They can also help increase your chances of finding an advisor that will work best for you —and with you.
1. Compile a list of attributes for your “ideal” financial advisor.
Do you prefer to work with some who specializes in working with people in the same field of work as you are in or that are at same stage of life as you? Does gender matter? Would you be more comfortable working with someone with extensive experience in wealth management, retirement planning or some other area? Do you prefer a particular communication style? Do you want an advisor that “takes control” or that welcomes and encourages your participation in all decisions?
2. Get referrals.
While you shouldn’t base your choice of an advisor on the recommendations of others, referrals can help you build an initial list of prospective advisors. Don’t limit your referral sources to family and friends. Reach out to colleagues, neighbors, other professionals you deal with such as attorneys and tax consultants, and people you know from clubs and professional organizations.
3. Conduct research.
Tap into its wealth of information to inform your search. Learn more about the advisors referred to you. (LinkedIn is a good option.) Investigate the companies they work for or are affiliated with, and assess the depth and breadth of resources available to them. Continue building your list of prospects by using “find an advisor” tools.
4. Interview your top prospects.
Face-to-face meetings work best. Things like body language, facial expressions, and eye contact can tell you a lot about a person. However, even a phone call can give you a sense of if an advisor might be right for you.
The key is to ask the right questions. Make sure the answers you receive raise your comfort level and your confidence in working with a particular advisor. While not a comprehensive list, the following are important questions to ask:
- Who is your ideal client?
The answer will help both you and the prospective advisor determine if there’s a mutual fit.
- How do you measure success?
Prospective advisors’ answers will tell you if your goals and interests are priorities for them.
- How involved can I be or do I need to be in decision-making?
Make sure any prospective financial advisor is willing to work the way you prefer, whether that means you will be very hands-on or trust the advisors with all the decision-making.
5. Assess your experiences in interviewing the prospective advisors.
Who did most of the talking? Did the advisors answer your questions clearly and directly? Did they use a lot of industry jargon? Do you feel comfortable with the way the conversation went? Do you feel like the person was someone you want to talk to again?
Consider it a bad sign if an advisor cut you off while you were talking, did not seem to be listening intently or was evasive when answering your questions. If you aren’t comfortable with the way things went, you can give a particular advisor a second chance. However, first impressions do matter. You may not want to spend additional time if you didn’t feel like the prospective advisor was someone you would want to talk with again.
Next Steps in Your Advisor Search
If you’ve decided on a financial advisor, set up your initial consultation to get the process going. The advisor will tell you how to prepare for that first meeting. If you’re still in the market for a financial advisor, don’t despair. Do your due diligence until you find an advisor that gives you confidence your goals will be met.
Interested in a financial advisor that has your best interests in mind? Use the LPL Find an Advisor tool.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
To determine which course of action may be appropriate for you, consult your financial advisor.
This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.