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5 Strategies for Choosing the Right Financial Advisor

5 Strategies for Choosing the Right Financial Advisor


5 factors to consider when selecting a financial advisor


Poor financial knowledge can lead to lost wealth-building opportunities and see you missing out on your most important money goals. This could be where a trusted, experienced financial advisor enters the picture. Financial advisors aren’t just for the wealthy; their professional advice can prove to be invaluable for anyone who wants to draw upon expert knowledge to secure their financial future and the future of their loved ones. Financial investors can work with you to address a specific goal, build your retirement savings, and set out a long-term plan for your assets. Finding the right advisor is essential, so here are five considerations to help guide your decision-making process.

1. Types of financial advisors and what they can help you with

Financial advisors might be regulated or not depending on your region. For example, in the US, there’s no federal law requiring people to be licensed to call themselves financial advisors. Other countries, such as Australia, require licensing. In the US, you might decide to go with an advisor who is an Investment Advisor Representatives (IARs) and employed by a company that’s registered as a Registered Investment Advisors (RIAs). These are bound by fiduciary duty towards you, so they have a responsibility to act in your best interests.

Expert advisers with years of experience and designations like Certified Financial Planners (CFP) are well placed to give you advice on everything from tax, investing in property, and building wealth for your family to insurance, trusts, and estate planning. At the other extreme is Robo-advisors, which is a digital platform offering automated advice at a minimal cost. These focus on basic advice on common issues like retirement, diversification in investments, and saving.

2. Decide what advice you need

Before you research advisors, consider the type of advice you’re looking for so you can find an advisor with the right expertise. You might need investment advice, advice on debt management, budgeting assistance, or guidance on insurance products. Alternatively, you might be after a smarter tax strategy, guidance on retirement planning, or information on estate planning.

Is it a specific and one-off challenge that needs addressing or do you need a long-term plan, such as to pay off debt, save for retirement, or build security for your family? Are you looking for an advisor for ongoing advice for investing, tax, and buying a property? At your life stage, you might need fairly straightforward advice or you might be looking for an in-depth, comprehensive financial plan for more complicated financial affairs.

3. Research financial advisors

Start shortlisting prospective financial advisors. You can do this by searching online, asking friends and family, and exploring the websites of professional associations. Most will have free databases you can use to find advisors who specialize in the type of advice you need. Check their credentials, backgrounds, and qualifications before deciding whether or not you want to book an initial interview.

4. Initial interview

The advisor should be willing to offer a complimentary introductory appointment before you commit. During the interview, he/she will likely take the opportunity to discuss your goals, requirements, and risk profile. At the same time, this is a great opportunity for you to not only ask questions but also to observe their communication style. A good advisor won’t rush you and he/she should be willing to listen to you.

Additionally, the advisor should be obliging when it comes to giving you detailed, plain-English answers to any questions you ask and explaining how they can make a real difference for your money goals – and where they can’t. A trustworthy advisor should be transparent about the limitations of their advice and what you can and can’t achieve. You can also find out about how they communicate with their clients on an ongoing basis, whether it’s email, phone, an online dashboard with real-time updates, or in-personal consultations. You should be comfortable with how you’ll communicate on an ongoing basis with your chosen advisor.

5. Questions to ask

You’ll want to prepare some questions to ask your advisor during your initial interview. These are some suggested questions.

How do you invest and what’s your track record?

You can better understand prospective advisors by finding out how they invest their money personally. Similarly, you can ask them about their investment philosophy and strategies in general. Some financial planners prefer a more passive approach where you buy and hold. Others might be more active. Knowing their investment approach will give you useful insights into how they’ll be managing your investments throughout different life stages and in light of any changes to your situation. Also, ask about their track record. Your advisor should have a good history of matching or outperforming market benchmarks with their existing clients.

What’s your fee structure?

Find out how your advisor will charge for their advice. Some advisors base their annual fees on a percentage of the amount they manage for you. For example, this might be 1% of the total value of investments managed. Others might charge an hourly rate or an initial fee for developing a plan and then another fee for putting the plan into action. Your fee might also vary depending on the complexity of your situation.

You’ll also want to find out whether the advisor receives commissions and other incentives for recommending certain investment products to his/her clients. A trusted advisor advises on your best interests only and shouldn’t be motivated by commissions, which would mean a conflict of interest. Finally, many financial advisors are open to negotiation when it comes to fees, so don’t hesitate to ask for competitive pricing.

What are your qualifications, licensing, and specializations?

Find out what qualifications and licensing the prospective advisor holds and consider whether they’re relevant to the type of guidance you need. Your advisor might be a  Certified Financial Planner (CFP) or a Chartered Financial Analyst (CFA). The CFP and CFA are among the highest financial planning and investment qualifications you can obtain worldwide. Also, your advisor might have relevant qualifications, like graduate diplomas and masters in financial planning, that demonstrate valuable skills and knowledge.

The advisor should hold the appropriate licensing issued by the relevant regulators as required in your jurisdiction. Make sure they have a clean record, with no regulatory or licensing issues. He/she might have certain professional memberships relevant to their specialization, and depending on the professional body, this membership could indicate high ethical standards and a solid track record of advice-giving.

Your advisor should have plenty of experience in providing the type of advice you’re looking for, to clients similar to you, whether it’s retirement planning or something more specialized like managing the wealth of business owners.


A great financial advisor can help you realize your wealth and money goals. However, not all advisors are made equal. Just as you would carefully research and vet someone to look after your children or pets, when it comes to a financial advisor, take the time to find someone you can trust and avoid rushing into a decision. Research their backgrounds and interview prospective advisors to get a good idea of how they deal with clients. Don’t be shy about asking questions about their approach, background, and track record with clients. Consider how they communicate and make sure you’re fully informed about their fees. By dedicating time and effort to your search, you should be able to find an excellent advisor who can tailor appropriate solutions to match your requirements.

Name: Jacqueline CoombeJacqueline Coombe


Author’s Bio: Jacqueline Coombe has been a prolific reader since childhood, and now channels her love of the written word into writing content on a range of topics from business, marketing and finance to travel and lifestyle. Jacqueline is also a Principal Consultant specialising in Search + Content Marketing at international digital marketing agency Webprofits.



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