How to Choose the Best Financial Adviser

You may want to restrict your search to certified financial planners. These professionals have passed certain exams and have a particular amount of experience as determined by the Certified Financial Planners Board of Standards. The organization offers a searchable database of CFPs by location.

Another common adviser credential is certified financial analyst, which indicates an individual has experience managing investment portfolios. And a personal financial specialist is a designation for certified public accountants with significant financial planning experience.

Before meeting with any of the planners on your list, check the CFP database to see whether they have been the subject of any complaints or disciplinary actions. Those with spotty records may warrant being crossed off your list.

Interview CFPs at several firms

Most CFPs offer a free consultation to discuss the client-planner relationship and how they might be able to help you. Ask them about their educational background, experience and specialties. Do they have access to other specialties such as taxes, insurance or estate planning, either within their firm or through referrals? How frequently do they communicate with their clients? Will they handle your affairs personally, or delegate most matters to an assistant?

Ideally, you'll want a planner who is ethical, has specialties that match your needs and access to other specialties that might arise, and who will hold your interests as a priority. But the most important part of your decision, of course, should be whether you feel comfortable talking to him or her about your finances.

Discussing payment

The first interview with the adviser also is the first opportunity to discuss how the adviser gets paid. Some planners work for an hourly fee, others on commission and some on a combination of the two. One-time advice is typically offered by firms that charge by the hour, while longer-term relationships often are structured on an annual fee or commission basis (often about 1% to 1.5% of the value of a managed investment portfolio). Also be aware of advice to buy certain products in which the adviser might have a direct financial stake, such as certain annuities and insurance products.