Part 2: 3 Things to Know Before Hiring a Financial Advisor

How do I find a good financial advisor?

Finding a good financial advisor can be challenging. But it’s important to keep your head up throughout the process. Finding an advisor is important for your retirement, after all.

I believe a good financial advisor should:

• Help you feel more confident about your retirement decisions
• Help you live a fuller retirement
• Recommend investment and tax strategies to help you reach your goals
• Return your calls
• Communicate pro-actively, typically several times per year
• Avoid high cost, questionable investment recommendations
• Have their investment advisor license
• Have no judgments or settlements against them
• Have a clean record in the BrokerCheck registry
• Have industry designations, (CFP, CRPC, APMA, CLU, etc.) which denote a specialization

I believe a great financial advisor should:

• Meet all the good advisor requirements
• Have designations relevant to your needs
• Work as part of a larger financial advice team

I believe when you speak to your advisor and their team, you should get the impression that you’re the firm’s most important client. Questions should be answered promptly, and you should feel welcome. You are trusting them with important assets, after all.

If this seems overwhelming, remember there are thousands of advisors out there. No matter what area of expertise you need, you can find an advisor to help you reach your financial goals.

How to Use BrokerCheck to look at an advisor's history

BrokerCheck tells you a financial advisors registration history, and it also tells you if they've had any judgments against them, and why they had issues. Follow these tips when using BrokerCheck to research an advisor:

• Look at any "disclosure" in BrokerCheck. Disclosure means that a customer had a dispute with the advisor or their company. If they have a disclosure, it doesn't mean they did anything wrong; it means that there was a disagreement.
• If the dispute was "denied", it means there was no basis for the dispute. You may see these from the early 2000s, or from 2008 through 2011. Investors may have complained about the stock market going down during these times. That's something financial advisors couldn't control.
• If there were "sanctions" or “penalties”, then the advisor was in the wrong and you need to investigate what happened.
• If there was a "separation", "suspension," or the worst, "BARRED" note, that means the company thought the advisor's wrongdoing was so bad that they got fired or, the government punished them by not letting them continue to practice.

While there’s no perfect way to find a great financial advisor, doing some research and understanding their history and how they work with their clients can go a long way to help you find someone who’ll do right by you.