How To Find The Right Financial Advisor in 5 Easy Steps

How To Find The Right Financial Advisor in 5 Easy Steps

What do you do when you’re looking for a mechanic? You probably look online these days, right? Run a search and look at some reviews. Then it’s probably a case of who can fit in the job, and for the least money.

Finding a plumber, or an electrician, might be a similar process. Even an accountant. But it’s far trickier to find the right financial advisor – and you most likely don’t want to be looking for the cheapest. I’ll tell you why.

To my mind, finding the right financial advisor is more like finding the right therapist. Or finding the right person to carpool across the country with. It’s a tremendously personal relationship, and it lasts a long time. Or it should, anyway. It’s about cooperation, teamwork and a mutual understanding.

You need to find a financial advisor who will not just listen to you, but hear you. Someone who will go to great lengths to understand what’s important to you, what you value and what makes you tick. You need a financial advisor who talks less than you do – they should be listening to you, and asking you questions.

Step #1: Decide What Type of Financial Advisor You Need

Let’s take it back a step.

Did you know there are roughly eight different kinds of financial advisors, although boundaries are beginning to blur a little. There are investment advisors, broker-dealers and brokers, Certified Financial Planners, financial consultants, financial coaches, portfolio/asset managers, wealth advisors and now A.I. is getting involved too – you can get a ‘robo-advisor’. Yeah, I don’t like the sound of that one either.

So it depends what you want. Financial coaches and consultants will give you the basics of financial literacy and help you start to build your wealth. Certified Financial Planners have a fiduciary duty to their clients, and can help people to organise their financial lives including creating retirement plans.

Wealth managers normally deal with the super wealthy, and help them to stay super wealthy. They normally deal with complicated financial services as well as investment guidance. Portfolio or asset managers basically help you to – as it says on the tin – manage your portfolio, or your investments.

Broker-dealers and brokers buy and sell stocks, bonds and mutual funds, either on behalf of a client, for their own account or both. A ‘robo-advisor’ – well, can we not just leave them in the cupboard with the robot vacuum cleaner? A ‘robo-advisor’ is basically an automated investment manager that uses algorithms to look after your portfolio.

Finally – investment advisors. This is a person who is paid for providing investment advice, and in some cases managing their clients’ assets. I personally serve as a Registered Investment Advisor, but am also fee-only and a fiduciary.

So when you’re trying to find the right financial advisor, always make sure that the person you’ve approached is going to offer you the right service for your needs. And be a bit careful about this, because this person may well want your business so badly that they will persuade you they’re the right person for the job – even if they don’t provide the service you’re after.

And also remember, that each financial advisor or service might cater to a specific niche. Some may only work with certain types of people. They might choose their clients by wealth level, by their age, their occupations, the industry they work in and so on. They may well specialize in a certain area and offer a very specific service. Others might work with anyone. Either find someone who specializes in clients like you, or find a general advisor.

Step #2: Check Designations and Credentials

You’ve found someone? Great – first step done. Now check that they have a valid registration. Some of these service providers need to be approved by a regulatory board. You can check investment advisors, broker-dealers and brokers, wealth advisors and portfolio managers through BrokerCheck.

Financial coaches and consultants don’t have to register and therefore are limited in the advice they can give. A consultant may be a ‘chartered financial consultant’ and you can check them out through Designation Check.

Certified Financial Planners are certified by the CFP Board. And lastly, robo-advisors…? Well, they answer to no-one. Just like the robot vacuum cleaners.

Step #3: Ask Yourself This – Do You Like Them?

This might sound trivial, but this is so important. You need to find someone who you are comfortable with and who you trust completely. Sharing your financial life with someone is a big step to take, and the right financial advisor will really want to get to know you well.

Trust your instincts here. As fluffy as it might sound, if you get a good feeling about someone, you’re probably in the right place. Any doubts – get out.

If you have shared interests and lots of common ground, then great. It means your financial advisor is likely to be on your wavelength and will understand your values and objectives in a more personal way. If that common ground is lacking, that’s okay but make sure your financial advisor is working really hard to get to know you, and see your life through your eyes.

Step #4: Ask Them This Important Question

There’s one vital question that you need to ask if you truly want to find the right financial advisor. And yes, you are the one who is interviewing them. You can grill them to make sure that they are the right person to share your financial information with. If they are the right financial advisor, they will be able and completely willing to answer all your questions.

You need to ask them who their ideal client is. If you recognize yourself in their answer, then that’s really promising.

When people ask me who my ideal client is, I am very clear with them. My ideal client is usually between the ages of 40 and 70, and is eternally young at heart. Many enjoy travel and are involved in their community and church.

My clients are pleased to hand over the reins of their financial life and let a professional manage their assets. They value the time it frees up, when they don’t have to make decisions about how their money is invested.

Additionally, they value good advice and appreciate the help in growing their wealth and keeping their tax bill in check. They want to make the most of their money while they’re able to, and to make sure they leave a legacy for their loved ones.

Most of my clients could be featured in the book “The Millionaire Next Door.” Most of them are more conservative and don’t like taking huge risks. They are more conservative-minded; the men would love a sports car and enjoy hunting and sports, while the women are social, enjoying clubs, charity work and socialising.

So make sure that any advisor you speak to can give you a detailed profile of their ideal client. This shouldn’t be because they’ve found a niche that is more profitable than another. It’s because they can do their best work with these people; they understand them, they are in tune with their goals, their morals and their value system and share some common ground.

When you’re trying to find the right financial advisor, it’s essential that you can identify with some of the characteristics of their ideal client.

Step #5: Ask One More Question…

Okay, okay – so I said there was one vital question, but there’s another one. When you’re sizing up financial advisors and trying to find your match, as well as finding out exactly what they do and with who, find out why they do it. Ask them outright: why do you do this job?

Their answer will tell you everything else you need to know.

Personally, I do this job because I am a people person. I love to get to know my clients well, as I do everyone. Wherever I am in the world, I’ll be talking to people, asking them questions about themselves and listening to their answers. When I visit a new country, you’ll find me in a bar or social place, meeting locals and hearing what they have to say. It’s not money that makes the world go round – it’s people.

Once I get to know someone well, I care about them. I can’t help it. And so I care about their lives, their families, and making sure that they get the most out of both, making sure that their money gives them a life that they want and that they love. I think that helping people fulfill their financial goals is helping them to ultimately fulfill their lives and live out their true purpose here on Earth.

There’s nothing I could find more rewarding, and I can’t help but be passionate about what I do. I often say I can’t tell if I’m working or having fun, and that’s the honest truth.

Trying To Find The Right Financial Advisor?

If you’re looking for some help with your finances and your investments, and like what you’ve read here, then maybe you’ll find that we’re a good match. So why don’t you get in touch and we can chat and take it from there. We’ll figure out together if I’m the right financial advisor for you.

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Add some financial confidence to your inbox with my monthly newsletter
Plus receive my free ebook: 5 Simple Ways to Bring the Purpose Back to Your Retirement Plan