7 Steps to selecting the right financial advisor | W. Ben Utley CFP® writes for Orthopreneur

Finding the right financial advisor to help you build your financial future can be as difficult as choosing the right doctor to care for your health.

The benefits of good advice are obvious: increased control over financial matters, a sense of confidence and security about money and a more “wealthy” outlook on life in general. Yet many people go their entire lives without so much as a financial checkup.


Like a visit to the doctor, a financial checkup means that you might find yourself standing “financially naked” before someone who would examine you from head to toe in order to diagnose your condition. They might even make some less–than-flattering remarks about your financial health before prescribing a treatment.

Don’t let the discomfort and fear associated with the all-too-taboo subject of money keep you from seeking the care of a competent financial professional. Follow these seven steps to improve your chances of finding the right advisor before you expose any of the details of your personal financial life.

Step 1: Make a Well-Founded List of Prospective Advisors
It’s easy to open your local phone book and look under “F” to find a financial planning consultant in your area, but this could be your first mistake. Don’t limit your search for an advisor. 

Begin by visiting these two websites:
www.napfa.org, the National Association of Personal Financial Advisors
www.fpanet.org, the Financial Planners Association

Also, perform an Internet search using the terms “physician financial advisor” and add a couple of advisors to your list this way. Look for signs of expertise such as published articles, a blog or maybe even a YouTube channel.

A search outside of your community means you increase the odds of finding the best-qualified advice for the price you may pay. A search inside of your state means that the advisors you find are more likely to understand your financial environment, including your state’s tax laws, economy, job market, unique investment opportunities and other factors that may impact the success of your financial plan. If you’re concerned about the advisor’s location, keep in mind that today, many financial advisors work with clients by telephone, email and video conference on a regular basis.

To round out your list of prospective advisors, ask your colleagues, your accountant and your attorney whom they might recommend. Ask them why they believe this advisor is the best one for you. If their reason sounds valid, add the advisor to your list.

Step 2: Select for Quality
Every prospective financial advisor on your list should have at least one real credential. Beware of generic pseudo-credentials like “financial advisor,” “financial consultant,” “wealth manager” and even “vice president.” These titles merely signify that an advisor is in the business and may hold a license. While most licenses require an advisor to pay a fee and pass an exam, these may be easily acquired with a minimal commitment of time and effort.

In contrast, certifications usually require a higher level of commitment and dedication. Formal training, rigorous examination, continuing education, years of experience and oversight by a board or governing body are part of attaining and keeping a certificate, so certification is an outward indicator of the quality of advice you may receive.

Narrow your list by crossing advisors off your list if they don’t have at least one of these credentials:
• Certified Public Accountant (CPA): Certified Public Accountants may have broad financial knowledge, but are particularly useful if  you own and operate your own practice. They often specialize in business planning or tax planning.
• Chartered Financial Analyst (CFA): Chartered Financial Analysts seldom delve into matters of personal finance since most CFAs specialize in the management of investment portfolios. If you have a large ($5 million or more) portfolio, consider seeking the advice of a CFA.
• Certified Financial Planner™ (CFP®): The Certified Financial Planner mark is the most sought-after credential among advisors who practice financial planning. While there are currently estimated to be 700,000 people calling themselves “financial planners,” only one in ten holds the CFP mark. If you need help with more than one issue in your financial life or if you are targeting long-term goals like retirement or college, make sure a CFP is on your list. Step 3: Do Your Homework
Learn more about the advisors who remain on your list. Visit their websites to find answers to questions like:
• What services does the financial advisor render? Find someone who solves problems like those you may have.
• What kind of clients is the financial advisor seeking? Make sure his or her answer describes a person like you.
• What is the financial advisor’s specialty? Beware nondescript statements like “high net worth individuals” or non-specialization statements like “businesses, individuals and nonprofit organizations.” 

Try to determine the kinds of clients they usually serve, and whether or not that description matches people in your same stage of life, or who share your same age, income and occupation.

Step 4: Ask a Few Key Questions
Every advisor on your newly-trimmed list warrants a preliminary phone call. This is an interview and you are the interviewer, not the interviewee, so make sure that you get the answers you need. Here are the questions to ask, and what you might learn from the answers:

1. How are you paid? There are only three answers to this question: commissions, fees plus commissions or “fee-only.” If you know exactly what product you are looking for, you might find it acceptable to work with a commissioned salesperson (a stockbroker or insurance agent, for example). However, when a financial advisor offers advice on products he sells in exchange for a commission, conflicts of interest may prevent him from giving you advice you can comfortably rely on. If you want objective advice, rule out prospective advisors who are compensated directly for services rendered. Advisors who accept only direct payment (checks, credit cards or direct debits) are known as “fee-only” advisors because they refuse to accept payments (like commissions or referral fees) from any source other than you, the client.

2. For whom will you be working, when you serve me? This may seem like a redundant question, since the advisor probably announced the name of her business when she answered your call. But the answer here tells you a great deal about how you may be treated. If your advisor is a “registered representative,” then she owes her first duty to the company that employs her, not to you. However, if your advisor is a fiduciary, she owes her first duty to you by law. You know you’re working with a fiduciary when she is registered as an investment advisor with her state or the U.S. Securities and Exchange Commission (SEC) and she uses a contract or engagement letter to form a business relationship with you.

3. How long have you been in business? There’s no substitute for experience. Look for at least ten years of experience delivering financial advice to people like you.

Make appointments to visit advisors who remain on your list after this screening round. You are almost finished with your search.

Step 5: Speak with at Least Three Prospective Advisors before Making a Decision Now you are ready to make the biggest mistake that most people make when selecting an advisor. What mistake is that? The mistake is to engage the very first advisor you meet. While this may solve your immediate problem, it may lead to less–than-stellar results over the long haul.


Almost all advisors hold up well during the first interview. They’ve been interviewed hundreds of times and they’re ready to sign you up today. Resist the temptation to sign up for services at the first meeting. Instead, collect information and get a feel for how you and the advisor might work together over the longer haul.

Let the advisor walk you through his typical get-to-know-you process, but make sure to come away with the answers to a few important questions, like:
• What does your ideal client look like in terms of age, employment and financial situation?
• How will you solve my problem?
• With whom will I work? You, or an assistant?
• How do you prefer to work with clients? By phone, in person, by email?
• What will I pay for your services this year? Over the next five years?

Asking these questions will reveal whether or not the advisor might do a good job of serving you. Ask a few more questions to find out whether you and the advisor might see eye-to-eye on the finer points of your financial life:
• What drew you into the profession? Why did you stay?
• What one thing do you do better than all the other financial advisors I might meet?
• What’s been your best experience with a client? Your worst?
• What do you expect from me as your client?

With this last set of questions, there are really no “right” answers. However, you might receive stronger and better advice from someone who shares your interests, beliefs or outlook on life.

Step 6: Consider What You’ve Learned
Think about your interview with each advisor. Ask yourself these last few questions before making your final decision:
1. How well did each financial advisor listen to me? The hallmark of a good relationship with your financial advisor will be your ability to communicate your needs to her. This means that she must do an excellent job of listening to you in order to understand how she can help. Consider the amount of time she spent listening to you versus the time she spent selling her services. 
2. How clearly did each financial advisor express himself? Even if you receive the very best financial advice from your new advisor, you might not follow the advice unless you fully understand it. Consider whether or not the advisor “speaks your language.” Make  sure you are comfortable with his style of communication.
3. What promises did each financial advisor make? Consider how each advisor attempted to win you as a client. Some advisors  may attempt to dazzle you with their past performance records or wow you with the big clients they’ve handled. The best advisors attempt to set clear, realistic expectations about your work with them during the very first meeting. They know the foundation for a great long term advisor/client relationship is their ability to make promises and deliver on them. Look for promises that include a clear statement of services and fees, regular contact and availability and a duty to act in your best interest.

Step 7: Select a Financial Advisor Who Suits You
When you finally decide which advisor to hire, you may realize something that good financial advisors already know: the financial advisor you choose may be a lot like you. People have a natural tendency to trust others who are much like themselves, so the advisor you choose will likely share your interests, your outlook and even some of the same financial goals you hold.

No matter which financial advisor you choose, make sure the one thing that you have in common is an uncompromised interest in your financial health. Start your search for a competent financial advisor today and begin enjoying better financial health tomorrow.

W. Ben Utley, CFP®, is an attending advisor with Physician Family Financial Advisors, a fee-only financial planning firm helping physicians throughout the U.S. to make a plan and get on track with saving for college and invest for retirement.

This article originally appeared in Orthopreneur with the title "7 Steps to Selecting the Right Financial Advisor".