Know what questions to ask. There are two things you should ask a financial advisor from the get-go, says Steve Lewit, CEO and founder of Wealth Financial Group in Buffalo Grove, Ill.
What standard do you adhere to, fiduciary or suitability? And what licenses do you hold?
"There are two standards of compliance in the financial industry, fiduciary and suitability," Lewit says. "Advisors who carry a fiduciary responsibility are legally bound to do the very best for you, to put you first in all their planning and product selection. A financial professional who has a suitability requirement is legally bound to provide products that are suitable, but which may not be the very best for you."
Lewit also recommends finding a financial professional who has a Series 65 license. "Any other licensing – for instance, a Series 7 or Registered Representative, carry suitability requirements. These folks are not called advisors and cannot do financial planning," Lewit says.
Lewit says registered investment advisors, investment advisor representatives and certified financial planners all carry fiduciary-level responsibility. You can easily spot these titles on business cards, websites and email signatures, if you look after the person's name and see RIA (registered investment advisor), IAR (investment advisor representative) or CFP (certified financial planner). Chartered retirement planning counselor (CRPC) and accredited investment fiduciary (AIF) are other designations that indicate a fiduciary responsibility.
Stick up for yourself. A financial advisor is going to pick up pretty quickly that you aren't vacationing in Fiji every spring, so you might as well make that clear upfront. Not that you should sell yourself short, but there's no harm in explaining your financial situation even if it's shaky or you're a beginner.
But your not having a million or more in the bank doesn't mean you should let yourself be treated badly. "If you get the sense that you are just going to be another number and not get the advisor's personal attention, move on and find someone who really cares about you," Lewit says.
In fact, if your potential financial advisor is still interested in talking to you once you've revealed your middle-class status, that's a good sign. Listen to your gut feeling, recommends Kevin Worthley, vice president at Wealth Management Resources in North Smithfield, R.I. "If the advisor seems genuinely concerned with your objectives and spends a lot of time in discussion with you on these topics, chances are they may be 'client-focused' and not only looking to their own bottom line," Worthley says.
And at the same time, it's helpful to remember that everyone pays something when they hire a financial advisor – and not everyone is out to get you.
As Ulin observes: "Middle-class Americans who were hit hardest by the recent recession are crying out for financial guidance, yet are the most skeptical people to trust a financial advisor or spend a dollar to get help."
Corrected on 09/03/13: A previous version misspelled the URL for Jemstep Portfolio Manager. It is www.jemstep.com.