Choose an Advisor

There are various types of financial advisors, each offering different services and charging methods. Here's a quick rundown:

• Certified Financial Planner (CFP®):
  A CFP® is a credentialed professional who provides comprehensive financial planning, including retirement, tax, and estate planning.
• Registered Investment Advisor (RIA):
  RIAs focus primarily on investment management and are required to act in your best interests due to fiduciary standards.
• Broker-Dealers (Brokers):
  They buy and sell investments on your behalf. While they provide investment advice, they are not always held to a fiduciary standard.
• Robo-Advisors:
  These are automated platforms that provide algorithm-based financial advice, often at a lower cost, but may lack the personal touch of a human advisor.

Understanding how your financial advisor is compensated is key to ensuring transparency and avoiding conflicts of interest. Common fee structures include:

• Fee-Only:
  Advisors who charge a flat fee or hourly rate. They do not earn commissions from product sales and are generally considered fiduciaries, meaning they are obligated to act in your best interest.
• Fee-Based:
  These advisors charge a fee but may also earn commissions from selling products. Be sure to ask about potential conflicts of interest.
• Commission-Based:
  These advisors earn a commission for selling specific investment products or services. If you choose this type of advisor, be sure to ask how their compensation is structured and if it affects the advice they offer.

When choosing a financial advisor, it’s essential to verify their credentials and ensure they are operating in your best interest. Start by checking whether the advisor is a fiduciary, meaning they are legally obligated to act in your best interests, putting your needs ahead of their own.

You should also verify their FINRA registration. The Financial Industry Regulatory Authority (FINRA) oversees brokerage firms and individual brokers, ensuring they meet industry standards. You can use the FINRA BrokerCheck tool to look up an advisor’s registration status, disciplinary history, and any complaints.

Beyond credentials and registration, ensure the advisor has specific expertise in the areas most relevant to your financial situation. Whether you're focused on retirement planning, tax strategies, estate planning, or investment management, an advisor with experience in your area of need can offer more tailored advice and solutions.

Most financial advisors offer a free or low-cost initial consultation. This is a great opportunity to assess whether the advisor is a good fit for you. During the consultation:

• Ask about their approach to financial planning and investments.
• Inquire about their experience working with clients who have similar goals.
• Discuss their communication style and how often you can expect updates.

This meeting also gives you a chance to gauge the advisor’s personality and determine if they align with your needs and values.

Ultimately, the relationship with your financial advisor is built on trust and communication. Pay attention to how comfortable you feel discussing your financial situation with them. Do they listen to your concerns? Are they responsive to your questions? Do they explain things clearly?

Trust your instincts. If something feels off or if the advisor is not transparent, it’s okay to continue your search.

Once you’ve chosen an advisor, remember that your relationship with them should be ongoing. A good advisor will regularly update you on your financial progress, help you adjust your strategy as your goals evolve, and be available to answer your questions.

Be sure to schedule periodic reviews to ensure your plan stays on track and that the advisor’s approach continues to meet your needs.