Shopping for a Financial Advisor? (in 2 Parts) Part 2-Some Finer Details

Shopping for a Financial Advisor? (in 2 Parts) Part 2-Some Finer Details
Stock photo

Details to consider.    These are details most folks don’t know or think about until it’s too late and they are in deep.


  • Are you shopping for specific types of investment or savings products?  CDs, certain bonds, stocks, mutual funds, closed-end funds, options, speculative stocks, etc.  Know whether your person offers what you want.  If you want individual municipal bonds, you probably don’t want a municipal bond mutual fund but if all your advisor offers is mutual funds, guess what you will probably get.
  • If you want/need insurance then specifically ask about insurance.  If you want only investment options ensure your person will provide investments only.  Did you know some investments are “wrapped” in an insurance plan?  Do you want your investments in an insurance plan?  You’ll pay for them both.
  • How does the advisor get paid?  Chances are you’ll pay by one of these three methods: a fixed up-front fee for everything, a percentage of assets under management, or commissions.  It could be a combination of the three methods. Any one of them could be good or bad depending on your situation.
  • If mutual funds are your primary investment vehicle, which fund families (mutual fund companies) does your advisor offer?  Generally speaking, offering funds from only one mutual fund family should cause additional probing on your part. A typical mutual fund family has some good funds, mostly average funds and some bad funds.  If you are limited to one fund family…well.  Wouldn’t you rather cherry pick from the best funds of numerous families?  What’s the reason the advisor offers funds from only one fund family?
  • How interested in you is your advisor?  Do they spend time getting to know you, asking numerous questions, delving into your investments, your personal expectations, your likes and dislikes?  The more they make things about you and not them and their products, the better.  They should want you to be an educated consumer.  An educated client makes the job easier for a good advisor.  There should be nothing to hide.  If keeping you in the dark is your advisor’s goal, then you should be asking yourself what is being hidden.  They should explain details and “why” they recommend certain products to your satisfaction.  You should never be unclear about what you are buying and why. Professional advisors want their clients to be a part of the process.  Taking time is not a problem for a professional.  Sales pitches and glossing over programs is designed to push something on you.  You should willingly want to participate in the purchase not be pushed into a game plan.  Buyer’s remorse is not part of a good advisors’ plan.

It Boils Down to Trust and Integrity.  After reading the previous points, can you see why so much of the selection process rest on trust and integrity within the relationship?  Advisors can do anything to anyone and make it sound right for you. You have to understand their agenda.  As best you can determine, you are looking for the person who cares about you first and foremost.  Then has the expertise and tools to deliver the best plan for your needs and temperament.  Because most folks don’t understand the financial world, most people put their entire trust in their advisor to make the right decision.  This opens you up to the possibility of unscrupulous sales practices.  Please get involved enough to be a participant in your financial game plan.  Know:

  • what are you in
  • why are you in it
  • what other options exist to achieve your goals
    • there are always other options
    • what makes the other options better or worse
  • whether your person has all the tools (both expertise and products) necessary to achieve your goals

You know the financial companies that offer help. Where do you go to find an independent adviser? Someone who works for you and not a firm. Try these sites. Plug in your zip code and go shopping.

Be an educated consumer.  Good advisors prefer it.

Read Part I here.

Related Content

Transition and Career

Preparing for Your Financial Transition

We don’t realize how indoctrinated we are in the Service culture until we are out and living on the other side. Leaving the Service can be a rough transition and you want to be as prepared as possible when you


Tax Deductions for Investment Expenses

The following tax issue is tricky seek professional tax help if you intend to use this provision. There are no tax specialists at MOAA. We are about awareness, not advice. “You can deduct investment fees,