4 Questions to Ask When Choosing a Financial Advisor

Aug 24, 2019 2 min read

You’ve decided you want help investing your money, and you’re in the process of choosing a financial advisor. How can you find one you can trust? Asking them these four questions will help you settle on the best advisor for you and your family.

1. What Certifications Do You Have?

First, research the credentials of any financial advisor you’re considering. “Financial advisor” is a broad term for anyone who provides financial advice in return for compensation, and some are considerably more qualified than others. Look for a Certified Financial Planner (CFP) when you’re choosing a financial advisor. This designation indicates that an advisor has completed exams in areas like financial planning, taxes, insurance, estate planning and retirement — and is an expert in the field.

In addition, certain licenses can indicate what services or products a financial planner can provide. The most common licenses to look for include:

  • FINRA Series 6: Looking for a financial planner who can sell mutual funds? You’ll want an advisor who has passed the Financial Industry Regulatory Authority Series 6 exam.
  • FINRA Series 7: The Series 7 license is for advisors who want to serve as general securities representatives. This means they can buy and sell stocks, bonds, mutual funds and other financial products.
  • NASAA Series 65: The North American Securities Administrators Association exams confirm that an advisor has the knowledge needed to practice in certain areas of the country. This exam is for investment advisors who manage accounts and portfolios for clients for a fee, but who do not buy and sell securities themselves.
  • NASAA Series 66: This exam is for financial advisors who want to serve as broker-dealers and are licensed to buy and sell investment products, as well as investment advisors who are licensed to provide financial advice for a fee.

2. How Do You Get Paid?

Financial advisors are typically paid in two ways:

  • Fee-Only:This means that your financial advisor will charge a rate based on what assets they would be managing for you.
  • Commission: A financial advisor may also be paid on a commission determined by what products you buy from him or her. This payment structure is more common when selling annuities, life insurance or disability insurance.

Ask potential advisors what they charge for their services. There may be an initial planning fee, for example. Cost shouldn’t be your only factor in choosing a financial advisor, but it’s an important one to consider.

3. What Clients Do You Work With?

Some financial advisors have a specialty. If you have a specific interest beyond making money over time, such as charitable giving, choosing a financial advisor with that niche experience can be beneficial.

In addition, it’s important that the financial advisor offer the right personal touch to match your needs, which will likely be very different if you’re a recent graduate versus just a few years from retirement. You want a financial advisor who understands your goals and will help you achieve them.

4) Can You Work With Me?

Can you see yourself working with this person and vice versa? How much contact do you want with your financial advisor? Will you be working one-on-one or with a team? Any of these details can make or break a working relationship, so determine what you need before choosing a financial advisor. He or she will be helping you manage your money.  Working with a financial advisor requires trust, personal chemistry and clear expectations.

Find the Right Financial Advisor for You

Choosing a financial advisor is a big task, even when you’re equipped with the right questions. Our Farm Bureau financial advisors are standing by, ready to help you meet your goals.

Want to learn more?

Contact a local FBFS agent or advisor for answers personalized to you.