Top 4 Tips: How to Find the Wealth Advisor that's Right for You

By Jeremy Sorci | October 12, 2015

We often hear from clients who feel overwhelmed by the process of choosing a wealth advisor, and it’s easy to understand why.

Jeremy Sorci is a CFP, Certified Financial Planner and a 401(k) Financial Advisor with Premier Financial Group in Eureka Humboldt CountyAfter all, there many choices out there and choosing a financial planning consultant is a lot like choosing a doctor; when you’re trusting someone with your health or your wealth, you want a trustworthy, knowledgeable and experienced professional on your team.

However, all investment professionals are not created equal -- and while slick ads may seem attractive on the surface, choosing a professional that you can trust with your financial future should be based on more than an effective marketing campaign. Here’s what to consider when evaluating wealth management advisors.

1. Vet Your Wealth Advisor's Education

Ever wondered how, exactly, one becomes a licensed financial advisor? Strangely enough, the position doesn’t require any specific educational achievements; the only requirement is passing a Series 65 exam which is a 130-question test that takes about three hours to complete. And the passing score? Seventy-two percent, otherwise known as a C-. Not very reassuring, considering the extent of trust and responsibility that investors place in their investment professionals.

Many wealth advisors choose to advance their knowledge through professional certifications such as:


  • Certified Financial Analyst®

  • Accredited Investment Fiduciary™

  • Accredited Fiduciary Investment Manager™

In contrast to mere licensure, these designations require the completion of a rigorous academic program that includes comprehensive exams and ends with at least a bachelor’s degree. Most also certifications also require continuing education to ensure that knowledge is up-to-date.

If you’re comparing wealth advisors, look for those with one or more of these professional certifications. In addition, a good advisor should possess expertise in areas such as accounting, finance, estate planning, tax issues and cost accounting, as well as mathematics, logic and communication skills.

2. Your Investment Firm Should Provide Transparent Costs and Expenses

The old adage “nothing in life is free,” certainly applies to portfolio management, but many costs accrue behind the scenes. Though you may only work directly with your advisor, you’re probably also paying mutual fund managers, bond brokers, stock traders, account custodians and others. When trying to determine exactly how much financial planning services cost, many investors unknowingly make the mistake of asking about commissions rather than expenses.

Here’s the difference: The term “commissions” does not technically include costs including, but definitely not limited to, transaction fees, fund management fees, fund loads and account management fees. This allows an advisor to answer your question honestly, but without actually giving you a clear picture of your total costs and expenses.

Instead, ask for an accounting of your total expenses. Of course, a good advisor won’t wait for you to ask about costs; they’ll initiate the conversation and provide full disclosure on every cost or expense that you pay for, whether it shows up on your statements or not.

3. Fiduciary Duty and Wealth Advisors

Jeremy Sorci is a CFP, Certified Financial Planner and a 401(k) Financial Advisor with Premier Financial Group in Eureka Humboldt CountyWhen you’re choosing an investment consultant, ensure that they’re a fiduciary. Fiduciary duty means that an advisor is legally obligated to put their clients’ interests before their own. Though it may seem that all financial advisors should be fiduciaries by default, that’s – unfortunately -- not the case.

Fiduciaries must register with regulatory bodies, such as the SEC or FDIC, that provide secondary oversight, ensuring that advisors comply with industry rules and regulations.

4. Personal Attention Impacts Strategic Wealth Planning

Blame it on lack of knowledge, skill or simply a deficit in that good old Protestant work ethic, but many investment professionals take a one-size-fits-all approach with each client, regardless of their unique situation and needs. A good advisor will take your individual circumstances into account when making recommendations.

After all, no two accounts have the same tax needs, type and amount of holdings, and estate planning needs, so why choose an advisor that treats all clients as if they were the same?

True, it’s a lot easier to simply base investments off of your age. But what about your specific financial goals? What’s your cash flow look like? Are there qualified accounts in the mix? What's your tax bracket? These are just a few of the questions that a good financial advisor will ask before making any recommendations.

While these criteria represent the basic requirements you should look for in an advisor, every situation is different. You may require your advisor to possess certain characteristics, from personality traits to a convenient office location, but the bottom line is this: Your advisor should live up to your expectations and you should feel comfortable trusting them with your financial future.



Posted in Financial Planning