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How to choose a financial advisor
If you’re searching for a financial advisor, look for someone who has the expertise to address your needs and the experience to help guide you along the way. It may take some time to achieve your financial goals, so think of your advisor as a trusted resource—someone you can build a long-term relationship with.
Our vetting checklist will help you ask key questions to assess an advisor’s approach to planning and communication style. It will also help raise concerns about disclosures, fees, and services.
In addition, you can review our list of basic financial terms and credentials to determine whether you need specialized services. If you’re still stumped, use our scorecard to make a confident choice.
Key takeaways:
- Schedule an introductory call. Ask about services, process, fees, and how the relationship works.
- Find the support that matches your needs. Look for an advisor whose knowledge and experience aligns with your life stage and goals.
- Prioritize transparency and accessibility: You should be able to easily understand their recommendations and know how to get in touch with them.
How do I search for a financial advisor?
Many people find their advisors through referrals from friends, family, or coworkers. Your employer may also offer financial planning services as part of your benefits. Of course, you can always refer to professional directories or search engines.
If you prefer an advisor who lives nearby, remember that proximity should not be the sole determining factor. You should also look at their credentials, communication style, and whether they serve clients who have similar needs.
To narrow down your choices, begin by picking three advisors and book introductory calls. Use our vetting checklist for each call so that you can compare them fairly.
Quick vetting checklist: How to find a financial advisor that fits
Here’s a checklist you can use in your first conversation. Schedule at least 15 to 20 minutes so that you have the time to get a real sense of how they work.
- Who do they work with?
Some advisors work mostly with families. Others focus on business owners, high earners, people with equity compensation, or those getting ready for retirement. - How do they help you build your plan?
Listen to how they talk about goals, tradeoffs, and next steps. A good answer should feel thoughtful and clear, not rushed or canned. - How are they compensated?
Keep it simple and ask for a real example in dollars. - What services are included?
Find out what kind of help comes with the relationship. This could include support around goal-making, insurance needs, and advice on investments. - What does progress look like in the first year?
How do they define progress and how they will help you stay on track? - How often will they be in contact?
Do they offer the level of guidance and coaching you want? - Are there any disclosures or issues in their background?
A good financial professional should be able to answer this directly and without discomfort.
Some red flags include being vague about fees, pushing a product too fast, statements suggesting guaranteed returns, or refusing to put anything in writing. The right fit should leave you feeling motivated and empowered.
What should I expect from the first meeting?
Your first meeting should feel like a conversation, not a sales pitch. A financial advisor should assess your current needs, articulate your goals, help with budgeting, and identify blind spots. They should also factor in insurance to protect you from risk, so that you can reach your goals with confidence.
You should leave with a clear understanding of their process and their approach to planning. As a next step, they should schedule a follow-up meeting, request additional documents, or share early ideas.
Remember that you are looking for someone to help you over the long term. You should feel comfortable checking in with them as your life evolves, without being judged.
What are the costs of financial planning?
Generally, there are two kinds of compensation models— “fee-based” and “commission based.”
Neither of these choices are automatically good or bad. What matters is transparency and whether the advice fits your goals. To compare options fairly, ask for total expected costs for year one alongside ongoing costs for subsequent years.
What does “fee-based” mean?
A fee-only financial advisor is paid directly by you. This could be a flat fee, an hourly rate, or a percentage of your investments. For example, you may pay 1 percent each year for ongoing management.
What does “commission-based” mean?
A commission-based advisor is paid when you buy a product. This could include insurance or certain investment products.
What is a fiduciary?
A fiduciary is obligated to put your interests first. This means that they should reveal conflicts of interest and not suggest plans or products that primarily benefit them instead of you.
If you want to work with a fiduciary, simply ask: “Will you act as a fiduciary at all times in our relationship? If not, when are you not?”
What are some common credentials to consider?
Some advisors offer specialized services that require a standard of education, experience, or training. Depending on the complexity of your needs, you may consider working with a professional who focuses on those areas.
CERTIFIED FINANCIAL PLANNERTM (CFP®)
A CERTIFIED FINANCIAL PLANNER TM (CFP®) has completed standardized training in financial planning, taxes, retirement, estate planning, and insurance. They can help if you want assistance with specific needs in addition to regular planning, insurance, and investment services.
Chartered Financial Consultant (ChFC®)
Much like a CFP®, a Chartered Financial Consultant (ChFC®) is an advanced financial planning designation that covers the same core areas. However, unlike the CFP®, the ChFC® has no board exam. Instead, candidates complete a comprehensive case study that includes insurance and advanced planning scenarios.
Chartered Life Underwriter® (CLU®)
A Chartered Life Underwriter (CLU®) is the oldest designation in life insurance and risk planning, focusing specifically on life insurance, disability, long-term care, and estate transfer strategies.
Retirement Income Certified Professional® (RICP®)
A Retirement Income Certified Professional (RICP®) is a specialist designation focused exclusively on retirement income planning, specifically how to convert accumulated assets into sustainable income streams, covering Social Security optimization, withdrawal sequencing, longevity risk, and healthcare costs in retirement.
Choosing the right fit: a simple scorecard
Once you have narrowed your selection, a simple scorecard may help you make your final choice. Rate each financial professional from 1 to 5 across the areas that matter most to you.
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Are fees, services, and next steps explained clearly? |
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Do they explain how they work in a way that feels clear and helpful? |
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Do you need general guidance or specialized support for goals like business, retirement, or legacy planning? |
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Do they seem to understand your priorities, concerns, and stage of life? |
Use this same scorecard for each person you meet with so that your comparison stays consistent. In the end, the best fit is likely the one you can picture working with over a lifetime.
What New York Life can offer
With professionals nationwide, you can find a local financial advisor who can guide you from where you are today to where you want to go next.
Your next 3 moves
- Consult our introductory call checklist to assess your picks.
- Use our scorecard to rank your options.
- Pick the top-ranked option and ask them to outline next steps.
FAQs
Choosing a financial professional can bring up a lot of questions. Most people want to avoid mistakes, feel confident, and know that they are making the right choice.
Fiduciary means the advisor must act in your best interest. A financial advisor in their fiduciary capacity should avoid conflicts, explain incentives, and recommend what fits your goals.
With fee-only, you pay the financial advisor directly, often through a flat fee, hourly rate, or a percentage of assets. With commission-based pay, the advisor is paid when a product is purchased.
Red flags include unclear fees, pressure to act fast, promises of guaranteed returns, and avoiding simple questions about how they are paid.
You can verify credentials by checking certification status online and reviewing firm history and any disclosures through public databases.
The average fee for a financial advisor is often around 1 percent of assets each year or a flat planning fee, depending on the service1.
You should meet with your financial advisor based on your needs, but many people meet a few times per year, with extra check-ins during big life changes.
You should talk to a financial professional before making major financial decisions like a new job, buying a home, starting a business, or planning for retirement. You should also consult with them around major life events.
Find a financial professional who can give you the guidance you need.
New York Life agents and advisors are backed by a team of experts who can get you closer to your financial goals.
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1https://www.investopedia.com/ask/answers/091815/what-fees-do-financial-advisors-charge.asp