How to Choose a Financial Advisor

When choosing a financial advisor, you may want to be sure you're entrusting your hard-earned savings to a professional – an experienced financial advisor who's in tune with your financial needs and goals. It's worth it to take the time to find the right person for you.

These five simple steps, among others, can help you compile a list of candidates:

  1. Know What You Need

    First, determine your financial needs and goals. They may be specific – such as planning for college or retirement – or overall investment growth. This will help you find an advisor best suited to your particular needs and life stage. Our Life Events Checklist and Key Questions to Ask may serve as a guides. 
     
  2. Get Referrals

    Seek referrals from other professionals, such as lawyers or accountants, or your financial investment firm if you have one. People you know are also good resources, particularly if they are in a similar life stage. You can also look for leads through the National Association of Personal Financial Advisors (NAPFA) or the Financial Planning Association.
     
  3. Look for Experience

    You may not need a 20-year seasoned veteran, but do look for a financial advisor who has at least a few years of experience and has been through a couple of market cycles.
     
  4. Check the Advisor's Background

    You'll want to verify your candidates' licensing and registration as well as their professional background, business practices and disciplinary history, including any complaints filed against him or her. These free online resources can help: SEC's Investment Advisor Public Disclosure Site, FINRA's BrokerCheck, and the websites for your state's securities regulator and insurance department.
     
  5. Ask About Credentials

    The Wall Street Journal reports there are about 200 different professional designations for financial advisors.¹ Some are far more difficult to earn and maintain than others. Some of the more rigorous credentials include: CERTIFIED FINANCIAL PLANNER (CFP)®, Chartered Financial Consultant (ChFC), Chartered Life Underwriter (CLU)

    Ask each one of your candidates about his or her credentials. What organization grants the credential? How much study was involved? Is there a code of ethics? What do you do to maintain the credential? A follow-up phone call to the credentialing organization can verify the answers.



¹ "The Credentials Racket." The Wall Street Journal (October 16-17, 2010).

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This information should not be construed as providing personal investment advice. Neither The Hartford nor any of its affiliates or subsidiaries recommends or endorses any particular advisors and are not responsible for any recommendations made by your advisor

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