Finding the right financial advisor is crucial to your financial health. There are a number of things you can do to help make sure you’re working with someone who will look out for your best interests rather than their own. Here are three ways to find the right fiduciary advisor near you:
1. Avoid Anyone Who Is Not a Fiduciary
The first step towards finding the right advisor for you is to avoid anyone who’s not a fiduciary (a professional that is required by law to act in their client’s best interest.)
In some professions; like law and medicine, professionals must act in the best interest of their clients at all times, no matter what. Unfortunately, in the financial advice space, there are no universal fiduciary requirements.
This means if your advisor has not chosen to act as a fiduciary, they can make recommendations that may or may not be in your best interest to generate higher commissions, trading fees, or third-party kickbacks for themselves.
This can create a disconnect between the advice you need and the advice you receive. So start your search by only hiring a financial advisor who is legally, ethically, and morally obligated to act in your best interest at all times as a fiduciary.
2. Align Your Needs and Their Specialty
Next, it’s critical to understand your needs and your advisor’s specialty and ensure that those two things align.
For example, like doctors, certain advisors will specialize in certain areas. Some are experts in investment planning, and their main job is to make an investment portfolio that fits your needs.
Others are focused on taxes and help you find tax strategies that you can use to lower your annual tax bill. When searching for an advisor, find one who specializes in helping clients just like you and provides the services that you need.
If you own a small business, you should find a fiduciary advisor who helps small business owners make money. Or, if you’re getting close to retirement, you might want to hire a professional who helps people get ready for and move into retirement by offering retirement planning services. That will make sure that your advisor knows everything there is to know about retirement, from tax-optimized withdrawal strategies to Social Security planning and everything in between.
So, first, get clear on what type of client you are, and then ask your advisor what type of clients they specialize in working with. To help get clear about your advisor’s specialty, ask the following questions:
- What areas of financial planning do you specialize in?
- How would you describe your typical clientele?
- What kinds of problems do your clients face, and what strategies do you use to overcome them?
By matching your needs to your advisor’s area of expertise, you can ensure you’re working with a professional who understands and can solve your unique financial problems.
3. Verify Their Experience and Credentials
Last, once you’ve found a fiduciary whose area of expertise matches your needs, you should check their experience and credentials.
Start by asking your advisor how long they’ve been in business helping clients. What is the training and education they have received in the industry? Where do they go to stay versed in new practices and policies? Financial planning is an ever evolving field.
Then, look up your advisor in the SEC’s Investment Adviser Public Disclosure database (IAPD) to make sure they are who they say they are. According to the SEC, this tool will let you:
- Search for an investment adviser firm or individual representative.
- View the adviser’s current Form ADV filing, including the firm’s current relationship summary.
- Check the adviser’s or individual representative’s registration status.
- View information on the representative’s professional background and conduct, including current registrations, employment history, and disciplinary events. Disciplinary events are called “disclosures” on IAPD.
- Link to a state regulator’s website.
- “Search the Financial Industry Regulatory Authority’s (FINRA’s) BrokerCheck website for information about brokers and their registered representatives.”
Next, understand their credentials. While there are many different professional designations within the financial planning profession, the CERTIFIED FINANCIAL PLANNER™ designation is considered the gold standard.
For your advisor to become a CFP® professional, they had to meet strict requirements for education, an exam, experience, and ethics. The easiest way to verify whether your advisor is a CFP® professional is to use the online Verify A CFP® Professional search tool. This can give you the confidence to select the right advisor for your situation.
Fiduciary vs Financial Advisor: How do you know if your advisor is a fiduciary?
The easiest way to verify if your advisor is a fiduciary is to look for the CFP® designation. CFP stands for “Certified Financial Planner.” This is a professional title that requires its members to take an oath to act in their clients’ best interests.
That oath states that all CFP® professionals “must act as a fiduciary, and therefore, act in the best interests of their clients.” So as long as your advisor is a CFP® professional, you can be sure you’re working with a fiduciary.
Tencap Wealth Coaching is here to help
If you’re interested in working with a CFP® professional to ensure your financial success, Tencap Wealth Coaching is here to help. Tencap has a CFP review and follows the recommendations of every client the company serves.
At Tencap Wealth Coaching, we’re focused on helping you achieve all of your financial goals and more through comprehensive, academically sound financial planning.
From investment management to retirement planning and tax strategies, we are here to guide you through the complexities of your money and allow you to enjoy life and live it in a purposeful way. Get to know Tencap Wealth Coaching or schedule an introductory meeting below.
Joe has been building and managing financial planning firms for the past 12 years. He loves the financial planning space and is very proud of the success and growth that has come from his proprietary marketing and leadership. Joe spent years being involved with the bright minds of the investment committee at Utah’s 529 college savings plan – a plan managing over 20 billion. Joe only works with firms that are stated fiduciaries on a client relationship. Joe is committed to leading a financial plan firm with ethics and integrity. The money management philosophy that Tencap subscribes to is built on strong academics and is supported by a highly impressive academic board. We can't wait to coach you on the excellence that Tencap stands for.