How Do You Find the Right Financial Advisor? Part 3

Part 3: Dave shares how to actually choose the right financial advisor—from credentials to chemistry.

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So we’ve set the stage, you understand the various models, but the $64,000 question still remains: How do you find/choose the right planner/advisor? Tip #1) Look at the prospective advisors’ credentials. Obviously. You’d really love to see a CFP or RFP, Certified Financial Planner, Registered Financial Planner.

These courses have really evolved over the years and are quite impressive now. Critics love to take some shots, but I’m telling you, the courses provide wide-ranging financial-planning knowledge to those who take them. Holistic planning expertise and strong emphasis on ethics. CPAs, of course, by definition have a great feel for tax planning and a naturally strong number sense.

I hope. But, interestingly, many don’t have strong backgrounds in the investment arena, nor sometimes in the insurance/estate planning end of things. Lots of exceptions, obviously. I do love when an advisor with a CPA also has a CFP or RFP. Then there’s the CFA, the Chartered Financial Analyst. This one’s interesting.

Very tough course. Excellent. People who pass, get the needed work experience and then the designation are sharp. No two ways about that. Many of my friends are CFAs. But it’s really more about the world of investing than financial planning. Like the CPA designation, love when a planner/advisor has a CFA AND a CFP or RFP.

Tip #2) Meet with candidates a minimum of two to three times. Yes, it’s a pain. No, most don’t do it, but it’s important. You’re looking for fit. Do they specialize in a certain profession or demographic? What kind of clients do they most enjoy working with? What beliefs do they hold now that they didn’t hold five years ago?

Always liked that question. #3) Pay attention to chemistry and communication skills. Of course, credentials matter but do you like them? Do they feel comfortable to work with? Do they ask you a lot of questions? Do they seem eager to get to know you? Not just your numbers, but you… your hopes, your dreams.

You’ve heard those great advisors and planners we’ve had on the podcast. They are outstanding communicators. They’re great listeners. #4) If you thought that was a bit new agey, wait for this one. Try through the conversation to somehow get a feel for these two things. 1) Their passion level. Can you hear a true desire to help coming through?

And 2) Their curiosity level? These two often walk hand in hand. Do they love this stuff? The best planners do. Ask them: “What are your favorite books, your favorite podcasts?” The really good ones will love those questions. They’re constantly learning from other experts, stealing examples and turns of phrases. As I said,

do they love this stuff? Do you get that sense? #5) Go to their social media pages. Do you enjoy their style of communication? Do they use humour? How do they handle comments? Now, outta fairness, I should point out that I meet some outstanding advisors who don’t even have social media. So don’t put too much weight on this. #6) Ask for references.

Yes, clearly they will only give you names of clients they know will speak highly of them, but this is still a very valuable exercise. Talk to those references. How often do you hear from blank? Is he or she willing to patiently walk you through certain points? What could you as a client do better to help him or her help you more effectively?

That’s a good one. If you had to change one thing about blank, what would it be? Ask ChatGPT to help you with other questions. #7) Ask for a couple redacted plans. Do you know very few people do this? But I think it’s wise. Now, most advisors will want to be there when you look at it. Explaining some of the thinking behind it, what’s the process that led to it and that you’ll be experiencing?

Okay. This video is long. I’ll do one more in this subject covering: Can you just use AI? And how do you find the right candidates in the first place to ask all these questions? I’ve got good answers. How’s that for a tease?