Tapping a financial advisor is one of the first few steps to attain financial freedom. There are various advisors in the marketplace, but not all of them posses the same level of expertise or qualifications.

Before entrusting your financial future to a professional, consider the following factors:

Educational Background and Qualifications

One can review an advisor’s background by checking his or her LinkedIn profile or resume. That way, you can find out the companies they may have previously worked for and why they left. Financial advisors can secure several licenses or certifications, such as the Chartered Financial Analyst, Chartered Financial Consultant, Certified Financial Planner, or Certified Public Accountant. These qualifications signify their years of experience and expertise in the industry.

Services Offered

Not every advisor does all things. It is imperative to know if a potential advisor can offer all of the services you need. Regardless of what your needs are, ensure the advisor can meet all of those. You also have the right to ask what actions he or she will take to implement, update, and maintain any plan you created together. Go with the advisor who can meet you at set times during the year to evaluate the results of their work and check on your investments. One should also figure out if your advisor will meet you directly or is part of a team rotating client meetings.

Track Record

Ask a prospective advisor to provide some (sort of) proof on how he or she has treated their clients in the past, regardless of the overall market condition at that time. Ask them if their books are audited and by whom or which company. If possible, talk to their auditor. Do web searches on the financial advisor for any ethical violation or crime committed. If you check the Financial Industry Regulatory’s BrokerCheck site, you can find out if an analyst has been disciplined for any fraudulent behavior.


Check references by asking a potential advisor to get you in touch with some of his or her clients. Talk to these people who have been seeking the services similar to what you are looking for. Ask the frequency of their meeting with the advisor in question and form of communication. You could also ask them about the services they have rendered, amount of assets they oversee, and quality of their service. Better yet, ask them why they chose this advisor. Make it a point to meet the financial advisor in person to determine how they treat their clients, as well as respond to questions.

Payment Terms

Financial advisors offer varying fee structures. But in general, you can either pay an hourly rate or a fixed rate. Some base their charge on the percentage of assets managed. Those who are fee-only earn no commissions for selling certain vehicles to clients. Some may charge a commission on financial products and securities being bought and sold. Bear in mind any advice given should not be dependent on the advisor profiting from it, too. Shy away from compensation plans involving numerous trades of securities or purchasing particular investment instruments to avoid conflict of interest. Most importantly, have the compensation agreement in black and white.