How I Found the Perfect Financial Advisor

So you have finally decided that your financial situation requires some professional help. You are going to hire a financial advisor.

But you have no idea where to begin the search for such a person. This is one of those occasions where a simple search bar phrase like “find a financial advisor” is not likely to prompt meaningful results. 

Hiring an advisor is not a decision to be made lightly. A financial advisor works for you, and you are in control of who you work with, but once certain decisions are made about how your money is going to be invested or budgeted, the advisor can move in a variety of directions.

You need to know he or she is going to do so with your best interests in mind. So how do you find the perfect financial advisor?

According to Spectrem Group, 44 percent of all investors find their financial advisor by receiving a referral from a friend or family member. You probably know someone who you believe handles his or her financial affairs in a wise manner. Ask them who they work with, and they are likely to tell you their advisor’s name — or tell you that their advisor might not be a good fit for you.

Here is a fun fact: There are investors who are wealthy and who do not want to refer their advisor to others. Either they don’t want to share, or they don’t want to feel responsible if the relationship does not succeed. So don’t be surprised if you ask a friend or family member for a name and you are stonewalled.

You may already have a financial advisor and not know it. If you have an employer-sponsored defined contribution plan like a 401(k), your funds are being handled by the financial provider in charge of the accounts.

That financial provider already knows something about you. Working with an advisor who is employed by that firm allows you to skip the first introduction and allows you to keep all of your investable assets in one place.

Sometimes advisors find you

Financial advisors advertise like crazy, and if there is an advertisement that strikes you as worthy, there is no reason not to make contact.

There are wealthy investors who work with a financial advisor who made first contact. Occasionally, phone calls or unsolicited emails can come from a reputable advisor.

It is so much easier today to research an advisor than it was 25 years ago. The Internet prevents anyone from hiding unpleasant information, but it also allows reputable firms to sell themselves to people who are on the lookout for financial advice.

There is one more way to find an advisor you like, and this search step can actually be beneficial to you. Many advisors hold introductory seminars, inviting folks like yourself to a dinner at a local restaurant where they can tell you how they can provide financial assistance.

This is not like attending a timeshare event; the advisor is not going to pressure you into signing your bank balance away.

Advisors who host seminars of this type are hoping for a 10 percent return on their own investment, and know that they may not appeal to every potential client. But they are also putting themselves out there in a very public manner, which typically erases the shady aspect of the business of attracting clients. 

It is probably wise to investigate more than one advisor before signing on. Every advisor offers a different appeal. Casting a wide net allows you to consider more possibilities in terms of age, gender, approachability, communication habits and knowledge.