How to Find a Financial Advisor Who Meets Your Needs

Many investors don’t have the expertise to make all their own investment decisions, and therefore they want a reliable financial advisor. While nothing can guarantee a financial advisor’s reliability, there are some things you can look for.

Investigate your advisor’s background. The website of the Financial Industry Regulatory Agency,, will tell you which states many advisors are registered in, along with exams passed, licenses held and employment history.

Learn how the advisor makes decisions. Performance is important, but so is the decision-making process.

Evaluate the advisor’s track record. While different clients will have different investment goals, you can ask how the advisor’s other clients performed relative to their benchmarks.

Understand how the advisor is paid. Different advisers are paid differently: Some receive a commission on the securities they sell, and others charge fees, either flat, hourly or based on a percentage of assets under management.
Be sure you understand and are comfortable with the fee structure.

Get it in writing. Ask for a formal written description of the services the advisor will provide for you and the fees you will pay.

Understand fiduciary responsibility vs. suitability. All advisors are required to sell you “suitable” products, but advisors who also take an oath of fiduciary responsibility are legally bound to act in your best interest. Be sure you are comfortable with your choice.

June 2009