Money’s Personal: Make Sure Your Financial Adviser Isn’t a Stranger

When you’re looking for a financial adviser, you’re actually looking for someone to help you manage that personal relationship with your finances.

By SHARE

While money may seem like a logical, rational topic, you probably have noticed that your relationship to your own money is deeply personal and emotional. It makes sense—the amount of money you have in the bank is closely tied to how secure you feel about your future. Major shake-ups in your financial situation also usually accompany larger life transitions, such as getting married or having children.

So when you’re looking for a financial adviser, you’re actually looking for someone to help you manage that personal relationship with your finances. With more than 300,000 credentialed advisers in the United States, how do you find the person with whom you can establish a close, trusting relationship? Many directories that are available from industry groups online—such as the listings from the CFP® Board—give little more detail than a phone book, making it hard to know what the experience of working with at adviser would be like.

With that in mind, check out these tips on finding the right adviser for you:

Find someone you like. You might picture a typical adviser as an uptight old man in a suit, who will drone dull and impossible-to-follow financial advice at you—but that isn’t the case at all. We researched the San Francisco Bay Area financial adviser community and got a chance to learn about the wide range of personalities represented there. Becoming a financial adviser is a second career for many—if you think you can’t get along with a Wall Street type, never fear, that isn’t your only option. Plenty of advisers also specialize in working with specific communities, so if you want to work with someone of the same faith, ethnic background or gender as yourself, there is an adviser out there for you.

Think about what you want to get out of the relationship. Advisers are not identical. There’s a huge range of services they offer: from creating a budget, to helping you invest your money, to helping you plan your charitable giving or execute a socially responsible investing strategy, among other financial tasks. Make a list of your goals before you start interviewing advisers.

Understand professional designations and different fee structures. The initials after financial advisers names that are intended to tell you about their training and areas of expertise can often feel like little more than alphabet soup. The Financial Industry Regulatory Authority provides a guide to financial adviser designations—but the guide contains hundreds of specialties. So before you meet with an adviser, be sure to look up their designations, in order to know more about their training and ability to help you reach your goals. Similarly, be sure to understand an adviser’s fee structure—when you’re trying to find a financial adviser, “how do you get paid?” is not a rude question to ask at the first meeting.

Don’t wait to hire an adviser to start your financial education. Beyond hiring an adviser you like and trust, personal finance questions are a part of day-to-day life, and your financial education should start well before you sit down with an adviser for the first time. Do your own research, and don’t be discouraged if information online seems confusing. An adviser can be a trusted ally and a teacher to you as you manage your finances, but build your own knowledge so you’re not following them blindly.

Amelia Granger is an analyst at NerdWallet, a website dedicated to providing unbiased financial information. NerdWallet recently launched the Ask an Advisor platform, a new way to connect with quality financial advisors and to read their answers to personal finance questions.