How to choose a financial advisor

Most people choose a financial advisor the way they choose a dentist: a friend mentions a name, the office is nearby, and the first meeting goes fine. Sometimes that works out. But an advisor may influence decisions worth hundreds of thousands of dollars over decades, so it pays to be a little more deliberate.

The good news is that you don’t need to understand investing to choose well. You need to know what you want help with, how to compare a few candidates, and which answers should make you pause. That’s what this guide covers.

1. Get specific about the help you want

“I need help with money” is where everyone starts, but advisors do very different kinds of work. One person wants a written plan they can follow on their own. Another wants someone to manage every account. Someone else needs a steady hand through one big moment, like retiring or receiving an inheritance.

Before you search, write down two or three sentences about your situation and what would make you feel the effort was worthwhile. It doesn’t need to be polished. It just gives you something to compare advisors against.

2. Learn how the advisors you’re considering are paid

Pay structure shapes incentives. Advisors are commonly paid in one of four ways: a percentage of the assets they manage, a flat or hourly fee, a subscription, or commissions on products they sell. Many use a mix.

None of these is automatically good or bad. A commission can be reasonable for a one-time insurance purchase. A percentage fee can be a fair price for ongoing management. What matters is that you understand the arrangement and know your total yearly cost in dollars, not just as a percentage.

Ask every advisor the same question: “What would I pay in total each year, in dollars?” The answer, and how easily they give it, tells you a lot.

3. Build a short list of three

Search for advisors near you, or widen your search if you’re comfortable meeting by video. Look at experience, licenses, the services their firm offers, and any account minimum. Three is a good number: enough to compare, not so many that the meetings blur together.

Pay attention to the firm as well as the person. A solo practice and a large national firm can offer very different experiences, and neither is better for everyone.

4. Interview them, using the same questions

Most advisors offer a free first meeting of 30 to 60 minutes. Bring the same handful of questions to each one and write the answers down right after. Comparing answers side by side is far more useful than relying on how each meeting felt.

Notice how they listen. A good advisor asks about your goals before talking about products, explains things without jargon, and doesn’t rush you.

5. Read the paperwork before you sign

Ask for the firm’s Form CRS, a short relationship summary that covers services, fees, and conflicts. Skim the Form ADV brochure, too. Then confirm in writing the services you’ll receive, the total cost, how often you’ll meet, and how to leave if it isn’t working.