Barbara O’Neill, Extension Specialist in Financial Resource Management
Rutgers Cooperative Extension
April 2018
Choosing a Financial Advisor
Being an investor takes some know-how. You can do it yourself using print or online resources or you can reach out to people in the financial services industry to find the information and advice that you need. Generally, consumers pay a fee or commission for financial advice, but it may be much less than costly financial mistakes.
Getting financial help is a little like building a house. Most often, it takes a whole team of people to get the job done: plumber, electrician, carpenter, carpet layer, roofer, and more. To get your financial house in order also takes a team of professionals: banker, tax preparer, attorney, insurance agent, employee benefit counselor at your place of work, stock broker, and/or financial planner.
Are you looking for a financial advisor (e.g., financial planner, counselor, or coach)? Here are some questions to ask according to the Association for Financial Counseling and Planning Education (AFCPE):
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What experience do you have? Ask for a brief description of financial professionals’ work experience and how it relates to their current practice.
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Is there an oversight body requiring ongoing education and ethics? Ask about the credentials a professional holds and learn how he or she stays up to date with current changes and developments in the personal finance field.
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What services do you offer? Asks about credentials, licenses, and areas of expertise that determine the services a financial professional can offer.
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What is your approach? Make sure a professional’s philosophy and approach aligns with your needs and values. You also may consider your financial professional’s personality and communication style and personal compatibility.
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What types of clients do you typically work with? Some financial professionals prefer to work with clients whose assets fall within a particular range or are of a certain age.
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How much do you charge? A financial adviser should provide an estimate of possible costs based on the work to be performed.
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How will I pay for your services? Financial professionals can be paid in several ways (e.g., fees and commissions). As part of a written agreement, an adviser should make it clear how they will be paid for the services to be provided.
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Do others stand to gain from the financial advice you give me? Ask the professional to provide you with a description of any conflicts of interest in writing.
Consider requesting a referral from friends, family members, and other advisers. Also ask whether an adviser has ever been disciplined for any unlawful or unethical actions and double check with your state securities agency to make sure. Once you select a financial advisor, be involved and ask questions. Review your portfolio periodically, at least annually, to be sure your investment strategy will help you reach your financial goals.
Review monthly statements carefully and understand what they say. In addition, monitor economic conditions (e.g., interest rates) to see things on the horizon that may affect your investments. Then consult with your financial professional for advice. If you have a complaint about your financial professional, act quickly to resolve the situation. Financial professionals can be a great investment asset so choose them wisely.
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