All advisors are not the same. You need to find out how they get paid and if they have conflicts of interest.

As a starting point, you should answer the following question: Do I need a financial advisor?

Many people can find answers to their financial questions in books, in blogs, and by using resources such as calculators and budgeting tools.

If you have a complex financial picture, then consider working with a financial advisor. The cost of advisors can be prohibitive, so it is important to understand their role and the fees they charge.

What is an advisor?

All advisors are not the same, some work as fiduciaries and others do not.  A fiduciary puts your needs first, and makes recommendations that are in your best interest.

There are two main ways advisors get paid. Some advisors charge a fee for their services, while others receive commissions on products they sell.

What does an advisor do?

An advisor's role is to advise you on issues such as investments (stocks and bonds), tax laws, insurance, education expenses and retirement savings.

Things to think about when selecting a financial advisor

Fee-only advisor

Instead of asking a sales representative what you should buy, think about hiring a fee-only financial advisor. Because fee-only advisors don’t receive commissions, they may be more likely to be objective about what to recommend to you.

What are the advisor's credentials?

While having credentials is no guarantee, they do indicate the individual’s level of understanding and commitment to the investment profession. Is the advisor a Certified Financial Planner, a Registered Investment Advisor, or other credentialed individual?

Fiduciary capacity

Is the advisor working in a fiduciary capacity? This means that the advisor is legally and ethically required to put your best interests first when making an investment recommendation.

How is the advisor paid?

Is the advisor paid commissions for selling certain products, or does the advisor earn a fee charged to clients only for the services provided? If you can determine how an advisor is paid, it will help you understand for whom this person really works.

Regular contact

Once you start working with the advisor, does she/he contact you regularly? Make sure you and your advisor meet at least annually to make sure you’re on track.
Can you easily contact your advisor if you have a question?

Advisor fees

What are you paying for the advice? And what are you paying in fees for the investments that are recommended?

How can I find an advisor?

Ask friends and family if they can recommend someone they trust. You can also search for fee-only financial planners at the National Association of Personal Financial Advisors. It is also a good idea to interview multiple advisors before making a decision to work with somebody.