5 Mistakes People Make When Getting a Financial Advisor


Getting a Financial Advisor is a big step in one’s life, planning for the future and ensuring your family is going to be taken care of.

During my research, by talking to family and friends and searching the internet, I found that the following 5 common fumbles where made when choosing an advisor and not making these 5 errors can help you find peace of mind, and avoid years of stress. 

1. Hiring an Financial Advisor Who Is Not a Fiduciary

By definition, a fiduciary is an individual who is ethically bound to act in another person’s best interest. This obligation eliminates conflict of interest concerns and makes an advisor’s advice more trustworthy. 

If your advisor is not a fiduciary and constantly pushes investment products on you, it’s time to find an advisor who has your best interest in mind. 

2. Choosing an Financial Advisor with the Wrong Specialty

Some financial advisors specialize in retirement planning, while others are best for business owners or those with a high net worth. Some might be best for young professionals starting a family. Be sure to understand an advisor’s strengths and weaknesses – before signing the dotted line.  

3. Picking an Advisor with an Incompatible Strategy

Each advisor has a unique strategy. Some advisors may suggest aggressive investments, while others are more conservative. If you prefer to go all in on stocks, an advisor that prefers bonds and index funds is not a great match for your style. 

4. Not Asking about Credentials

To give investment advice, financial advisors are required to pass a test. Ask your advisor about their licenses, tests, and credentials. Financial advisors tests include the Series 7, and Series 66 or Series 65. Some advisors go a step further and become a Certified Financial Planner, or CFP.   

5. Not Understanding How They are Paid

Some advisors are “fee only” and charge you a flat rate no matter what. Others charge a percentage of your assets under management. Some advisors are paid commissions by mutual funds, a serious conflict of interest. If the advisor earns more by ignoring your best interests, do not hire them. 

Overall, getting the right fit and asking the right questions can help you get the best financial advisor for your lifestyle and needs. Do not forgot it’s your money and not theirs.