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By: AgFed Credit Union

Welcome to AgFed Credit Union's MoneyDig blog! 

Get confident about your personal finances with a number of articles, tips, advice and more.


How to Choose the Right Financial Advisor for You

 Jun 06, 2022
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Not everyone is a financial guru when it comes to investing or managing long-term retirement plans. Even if you have the knowledge and insight, keeping up with the latest rules and economic trends can become exhausting and time-consuming, ultimately causing you to miss out on opportunities.

Partnering with a financial advisor is a wise move when it comes to managing your money. And contrary to popular belief, the role of a financial advisor extends far beyond retirement planning.

What Does a Financial Advisor Do?

Financial advisors offer a wide range of services designed to help you meet your goals. While retirement planning is probably their most popular service, they also come in handy when you need help with:

  • Using investments to buy a home
  • Saving for your child's college expenses
  • Finding ways to pay for a wedding
  • Planning your taxes
  • Creating healthcare-related plans
  • Managing your wealth in general

While managing your investments, financial advisors can also help you focus on areas many people overlook, such as taxes and penalties. Common areas financial advisors can help you navigate include:

  • Retirement planning
  • Tax strategies
  • Charitable giving
  • Estate planning
  • Portfolio management
  • Insurance coverage

So, whether you already have an established career or are just starting out, partnering with a financial advisor is a smart decision to help you reach important milestones throughout your life. 

How to Pick Your Financial Advisor

Finding the right financial advisor requires more than simply picking the most popular company or relying on recommendations from others. You want someone you feel comfortable with and who has the skill set to match your financial needs. Consider the following tips when determining which advisor is right for you.

  1. Research Their Credentials

When looking for a financial advisor, friends and family may offer suggestions to help you begin your search. However, it's best to do your own research. 

It’s important to note that financial advisors must complete a series of examinations before offering their services to clients. Two popular certifications are Certified Financial Planner (CFP) and Chartered Financial Analyst (CFA).

Also, check if the advisor is a fiduciary. These individuals must maintain an ethical code to act in their clients' best interests. Before hiring a financial advisor, you can research their qualifications at

  1. Determine Their Payment Structure

There are three common payment structures among financial advisors. They include:

  • Fee-Only Advisors: These advisors earn their money strictly from fees, typically a flat-rate, hourly rate, or a percentage of the assets they manage for you. In most cases, fiduciaries operate on a fee-only basis.
  • Fee-Based Advisors: Fee-based financial advisors usually charge fees for their services but can also earn commissions. For example, the advisor may earn commissions on certain investments they suggest or, more commonly, on insurance products they offer.
  • Commission-Based Advisors: Commission-based advisors earn their income by selling third-party products and services. These advisors are not fiduciaries, but that doesn't mean they are not worth hiring. For example, you may encounter a financial advisor who only sells insurance products, which are typically commission-based products.
  1. Identify the Services You Need

Not all financial advisors are the same. While most will offer a broader range of services, such as retirement planning, others are more specialized. For instance, if you're looking to limit taxes in retirement, you may seek an advisor who focuses specifically on tax strategies. Alternatively, you may seek an estate planning expert to ensure your loved ones are taken care of after your death.

  1. Schedule a Consultation

Most financial advisors will offer a free consultation for new and potential clients. This is your opportunity to ask questions about the advisor, their opinions on certain trends, and strategies they feel will work best for you.

In addition to their suggestions, evaluate their personality and how well they listen to your needs. You want to work with someone you feel comfortable with and can trust.

Key Takeaways

Financial advisors can be very helpful with planning your current and future financial needs. Often, they identify options and make suggestions you may not have considered or knew were available. 

However, it's important to remember that the decision isn't permanent when choosing a financial advisor. If you feel your advisor isn't listening to your needs or making recommendations you believe are in your best interest, you can always switch to a different advisor. Seeking a second opinion on your financial plan is quite common today.

Finances are personal, so finding someone who can help you plan effectively while keeping your unique needs in mind is extremely important.

Your Turn

Have you ever worked with a financial advisor? Tell us about it in the comments!

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