How Finding a Financial Advisor is Like Dating, and How to Choose the Right One
Finding a financial advisor is a lot like dating. You want someone who understands you, aligns with your values, and has your best interests at heart. But as with dating, not every advisor is the right fit—and it may take some time (and a few “first dates”) to find the one who truly meets your needs.
With so many financial advisors out there, how do you know who to trust? Some charge fees, others work on commission, and only some are legally required to act in your best interest at all times. If you don’t ask the right questions upfront, you could end up in a long-term relationship that doesn’t truly serve you.
The Fiduciary Standard: What It Means for You
One of the most important questions to ask any financial advisor is:
?? “Are you a fiduciary at all times?”
A fiduciary financial advisor is legally required to act in your best interest, prioritizing your financial well-being over their compensation. In contrast, other advisors may only need to follow a suitability standard, meaning they can recommend products that are “suitable” for you—even if they aren’t the best option.
Think of it like shopping for a suit or dress.
This doesn’t mean all commission-based advisors are bad, but it does mean you need to be aware of potential conflicts of interest and ensure their recommendations truly align with your goals.
Beyond Fees: Finding the Right Fit
While understanding how an advisor is compensated is important, choosing the right advisor goes beyond just money. A great financial advisor should:
? Have experience working with people like you.
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? Communicate clearly and transparently.
? Align with your values and long-term goals.
? Offer a planning and investment approach that fits your needs.
Akin to dating, you may have to meet with a few advisors before finding the right one. Some might have impressive credentials but lack the personal connection you’re looking for. Others may be knowledgeable but don’t match your preferred communication style.
The key is to ask thoughtful questions, get a feel for their approach, and trust your instincts before committing.
Want to Know the 10 Key Questions to Ask?
If you're serious about hiring the right financial advisor, I’ve put together a list of 10 essential questions to guide your search. These questions will help you:
?? Understand the advisor’s qualifications and approach.
?? Identify potential conflicts of interest.
?? Ensure their values and expertise align with your needs.
All 10 questions are covered in detail in Episode 34 of Beyond Budgets. Listen to the full episode here: https://www.worthynest.com/bb-podcast/10-key-questions-to-ask-hiring-financial-advisor
Choosing a financial advisor is a major decision—one that can impact your family’s financial future for years to come. Take your time, ask the right questions, and don’t settle for anything less than the best fit for you.