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9 Mistakes You Should Avoid When Choosing a Financial Advisor

Choosing the right financial advisor is a major life decision that can determine your financial course for years to come.

So it’s important to avoid these following mistakes when you chose your financial advisor.

  1. An advisor who is not Fiduciary at all times:

A financial advisor should ethically put your interests above their own. So finding an advisor who is fiduciary is key so they can avoid any conflict of interests.

2. Selecting the first advisor you meet.

Though at times it seems tedious and you might be tempted to hire the first advisor you get to know, take your time in finding the right person. Interview a few candidates before you choose your pick.

3. Not Choosing the right kind of Advisor

Every advisor has their own specialty like someone’s strength is new business owner, or retirement planning or high net worth etc. Get to know your advisors strengths and weaknesses before you have a decision.

4. Not checking for Credentials

Don’t be shy to ask for your advisors license and credentials. There are advisors with knowledge but those don’t always have a certified license.

5. Not enquiring about your advisor’s strategy

It is important that your advisors strategies for you match with your vision for your finances. Some advisors have conservative outlook while others have a more aggressive or risk taking outlook. Make sure you see eye to eye when it comes to strategies with your advisors.

6. Not understanding the payment pattern

Some advisors work on fee only basis, that is they charge you a flat fee no matter the work, others charger you a percentage based on your assets being managed. Make sure your advisors don’t earn more by ignoring your best interests.

7. Hiring a financial planner based solely on reference

Every situation is unique and every person’s financial needs are unique. What has worked for your friend or relative might not necessarily work for you. So hire a financial planner that suits best for you and not because they were referred to you by someone you know.

8. Not vetting your advisor

You will find plenty of qualified people to be your advisor but not everyone will match your requirements and vibe. Make sure to do through research. Interview few of them and vet them before making any final call.

9. Getting carried away with big talk

Don’t get carried away by fancy office or big talks or promises. It is okay to look into your advisors work past and talk to other clients before you decided to choose them.


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