How to Select a Financial Advisor

How to Select a Financial Advisor

September 16, 2020

Tagged As: Wealth Management

This article is part one of a two part series focused on how to select a financial advisor, rebalancing and diversifying your investment portfolios.  In this article, we will discuss selecting a financial advisor.

Choosing a trusted financial advisor is like hiring someone to work for you. It’s comparable to a job interview, so it’s important to pay attention to the answers the adviser gives. You should be prepared to ask questions that will help you make an educated and informed decision so you can select the advisor that best meets your needs.

Are you ready to begin interviewing a potential trusted financial advisor? Here are some points to consider when evaluating financial advisors:

Fiduciary Responsibility 

If you’re looking for a financial advisor you can trust, then knowing whether they’re a fiduciary financial advisor is important. A fiduciary is held to the highest ethical standard in the financial services industry. Fiduciaries must always put your financial interests first. Non-fiduciary financial advisors are held to a lower standard of making “suitable” recommendations. Suitable is not the same as “in your client’s best interest.”

Questions to ask in the interview:

-Are you a fiduciary?


Services Offered

Understand the services they offer. Types of services may include but are not limited to: financial & retirement planning, portfolio management, investment planning, estate planning, trust & estate administration, retirement plan services, non-profit & charitable asset management as well as donor advised gift funds.

Questions to ask in the interview:

-What services do you offer?

-Are the services offered all-inclusive?



The method of compensation is a major factor in determining which type of financial advisor will best meet your needs. There are three main types of compensation; fee-only, fee-based and commission.


A fee-only financial advisor is paid directly by clients for their services. This could be in the form of a flat fee, hourly rate or a percentage of assets under management. Fee-only pay structure means they do not receive commissions or other payments from the sale of financial products they recommend to clients.


Also referred to as “fee and commission” compensation. Unlike fee-only advisors, fee-based advisors may also earn money through other means. Fee-based advisors make money through client fees as well as from commissions or brokerage fees. These fees can present potential conflicts of interest. The advisor may have a financial incentive to sell you the products from which they can earn a commission, even if it isn’t necessarily the best product for you.


An advisor who works on commission receives payments from companies for selling their products to clients. If you feel that a financial advisor is trying to sell you something, it is likely that they are paid on commission.

Questions to ask in the interview:

-How are you compensated?

-What is your fee structure?

-Are your fees fully-disclosed on your statements? If not, why?



Seek a financial advising firm with a team of experience and reputable credentials. Credentials are obtained by passing examinations that demonstrate proficiency in the subject matter. To maintain the designation, an advisor must adhere to an ethics policy and meet continuing education requirements. Some of the most sought after certifications that are highly regarded in the financial industry are:

  • CFP®, Certified Financial Planner - financial & retirement planning specialist
  • CFA®, Chartered Financial Analyst - investment specialist
  • CPA, Certified Public Accountant - tax specialists
  • JD, Juris Doctor (lawyer) - estate planning and administration specialist

Questions to ask in the interview:

-Do you hold any professional certifications or designations?

-Does your firm have a team of experienced people with different education and expertise?

-Does your organization have a good reputation?


As a local community bank offering Trust and Wealth Management services, we are here to help. For additional questions to our Wealth Management team, feel free to reach out to any of our Trust or Wealth Management Officers at 319-338-1522.

Investment products are not a deposit, not FDIC insured, not insured by any federal government agency, carry no bank guarantee, and may go down in value.