How Do I Pick a Financial Advisor?

Our editor-in-chief gives her two cents on finding the right financial advisor

Headshot of Kristin Myers between illustrations of people.

Dear Kristin,

How do you know when you need a financial advisor, and can you share any tips on how to choose the right one?

Sincerely,

Rowdy Rangers Fan

Dear Rowdy,

This is a great question and one that we hear a lot.

Let’s start with the first question: How do you know when you need a financial advisor? The answer, in short, is that it really depends on you. Do you want to invest or plan for retirement but don’t have the desire to research the details yourself? Then it might be time to bring in outside help, the same way you might hire someone to do your taxes or clean your house. Sure, you might be capable of doing these things on your own, but if you don’t want to and you have the funds to pay a professional to do them, why not outsource these tasks

Another good reason for hiring a financial advisor is when your financial picture becomes more complicated than you’re willing to manage alone, such as if you own multiple properties or invest heavily in stocks and other assets. For someone in this scenario, it might be best to hire a financial planner (a type of financial advisor who offers more comprehensive services). Consider the complexity of your finances to determine whether it might be a good idea to seek extra help. 

Once you’ve decided you do want to hire someone to help take care of your money, where do you begin? For starters, it needs to be someone you trust and whose advice you’re willing to take, so choose wisely.

Next, decide why you want an advisor. Do you want help investing? Planning for retirement? Optimizing your taxes? Something else? All of the above? Asking yourself these questions will help narrow down the right type of advisor for you.

Then, you should find someone reputable. If you want more comprehensive services, you’ll probably want a financial planner, so look for someone who is certified. If they’re advising you on investments (or investing your money for you), they need to be registered with the Securities and Exchange Commission (SEC) or the appropriate state securities regulator. You’ll want to ask other questions about their compensation, fees, typical clients, philosophy and approach to money, and areas of expertise. More importantly, if it doesn’t feel like a good fit, don’t hesitate to keep searching.

Good luck!

-Kristin

If you have questions about money, Kristin is here to help. Submit an anonymous question and she may answer it in a future column.

Article Sources

  1.  FINRA. “Choosing an Investment Professional.” Accessed Feb. 11, 2022.