It takes a process – no luck – to find the right financial advisor


Linda and her husband Stan recently heard me as a guest on a podcast. They are retirees, living near Daytona Beach, Florida, unsure of “which way to go with our money.”

Linda thought I sounded like “exactly what we hope to find, someone who speaks our language, who is honest, who can help us make a plan to make our money grow and last, and maybe even be helping us understand how to manage our estate.

With that in mind, she tracked me down and called, hoping she could hire me to be the family’s financial advisor.

She was, of course, wrong about me. Not on the honesty or the language part, but on how I could help him. I am a journalist, not a financial planner; I don’t have clients and I don’t sell financial services.

Even when I told her this, Linda was hoping she could persuade me to accept some of her money for advice, even though I had never heard of myself until I found myself invited into the room. one of his favorite financial shows.

This is no way to choose a financial advisor.

Linda and Stan are lucky they hadn’t heard of any fraud on the radio, which would have been only too happy to take their money.

Of all the blunders an investor can make, few have more impact on their future than hiring the wrong advisor. And yet, most people spend less time and effort choosing an advisor than buying a new toaster.

The results – a mismatch between individuals and the financial advisers they’ve chosen – is something I’ve heard often, in large part because I’ve written two books on choosing and working with financial advisers.

Decades of meeting with client advisors have proven to me that even people who end up being satisfied with their advisor screw up the selection process and rely more on luck than information.

It starts early in the process, which for most people is not organized research.

Typically, individuals, couples, and families come to the conclusion that they need financial help after years of trying to build up a nest egg and manage their money on their own. By the time they decide to get a lawyer, they have an idea of ​​what they are looking for.

As a result, any advisor they come across – whether at a cocktail party, from a friend’s recommendation, through a web search, etc. a new potential customer.

Providence has not brought you “the right person at the right time”; human nature just makes it seem so.

The tone and tenor of the counseling relationship – the effort required to develop an investment and money management plan and the emotional discipline to stick to it – is only evident later.

Without it, individuals can only find a better match by interviewing multiple candidates for the job, creating a measurement tool to decide who they trust to be the best fit for their lives.

You want a trustee – someone who is dedicated to putting your interests first – and you might prefer a nearby location, some compensation structure (fixed price for assets under management or commission, for example), but you don’t just look for someone who “ticks the boxes” on your wishlist.

You are looking for your financial partner, whose “bedside manner” will make you comfortable going their prescribed path.

Whether before or after these initial interviews, any candidate consultant should undergo a background check; it may seem difficult to verify a broker or investment advisor – as well as the company they work for – through FINRA’s BrokerCheck service (, but almost every advisory scam you’ve heard of talking could have been avoided. simply by contacting federal or state securities regulatory authorities to look for past problems.

In addition to the FINRA database, connect with your securities regulator (get contact details for the North American Securities Administrators Association at, and whether the advisor sells both securities and insurance, find out if there are any complaints on file with your state’s insurance commissioner (contact details available at, National Association of Insurance Commissioners website).

Don’t rely on an advisor’s referrals to be a sign that they’re good at their job; credentials are not a true measure of how someone works with clients.

Don’t blindly rely on recommendations from friends and family; there is no guarantee that they have chosen their advisor correctly. In addition, many of Bernie Madoff’s victims were people he had met at his country club, on a golf course, at charity events, or out of personal affinity; he relied on these bonds increasing confidence and decreasing resistance.

Focus primarily on what you get for your money, the service provided, and the price you pay for it. You are looking for a reasonable balance between services, costs and method of remuneration.

Examine sample plans – to find out what you’ll get – and ask for references; stay focused on satisfaction levels and on how the client enjoys working with the advisor and move away from “How Much Money Did He Make You” as risk tolerance, resources and needs this reference may be very different from yours.

Above all, keep asking questions. It will be difficult to work with an advisor who will not answer your questions until you have your money once you give them some control.

While my books offer dozens of forward-looking questions, you can get away with about 10. The CFP Board of Standards has a good list – and lots of great research-driven help –

If you’re not ready to get to work right off the bat, you shouldn’t be surprised to be disappointed later. This is definitely not the outcome that everyone wants when hiring a financial advisor.

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