How to Find a Good Financial Planner or Financial Advisor

No topic in all of finance gets worse coverage than how to find a good financial advisor or financial planner.  The main problem is space, but there is also a knowledge gap.  As a professional financial planner, I know what makes a good one and what makes a bad one.  Sometimes the ones that seem good aren't.  Let's jump in.

Get the Official Information

This is the easiest step and the one that almost no one ever recommends, much less tells you how to do it. 

You should be able to do all of this over the phone.  It is common financial advisor and financial planner methodology to "get the meeting" before doing anything else.  No problem.  Set a meeting two weeks out and ask the advisor to send you directions in the mail (not email) along with business card, and a list of what you should bring.  You can always cancel the meeting later.

Beware of anyone who isn't willing to take this basic step.  If they won't do this much work at your request, how much do you think they'll do in the future?  You don't care how they "usually" do things.  You want them to work for you.  If they won't do this because it isn't how they "usually" do things then they won't do other things you want later because it isn't how they usually do things.  Congratulations, you've just eliminated your first "non-good" advisor.

Analyze the Official Information

The Business Card and Letterhead

The business card and letterhead by law and/or regulation will have some useful information on it.  First, is the advisor's full name including any abbreviating or if they use their middle name or whatever.  It will also tell you who his broker/dealer is.  This may not be the same as the name of his company.  You will see in small lettering on either the front or the back either the phrase "Securities offered through..." or "Registered Representative of ..."  The name of the company after that phrase is the name of the broker/dealer and this is the actual company responsible for the behaviour and compliance of this broker.  Time to hit the Internet. 

Go to the  NASD website (now known as FINRA) at 

  • Click Broker Check.
  • Click Start Search.
  •   Agree to the terms and click Continue.
  •  Type in your advisor's name.
  •  When the records come up find your advisor by matching the name and the firm.
  •  Click that name.
  •  Click View Full PDF report.

The first page is just the table of contents.  The second page is the stuff the lawyers put there so you can't sue.  The third page is where the information starts.

The summary page tells you who they work for now, and who they worked for before.  Depending on the structure of those companies it might be kind of confusing so just ignore it for now.  On the right hand side is what you are looking for.  It is the disclosure of complaints and events.  Do NOT put too much weight on this one way or the other.  It is very easy for an incompetent shifty greedy financial planner to go their whole career without a complaint.   So just because it says "none" doesn't mean everything is great.  It is also possible for the world's best financial advisor to get a complaint from someone who was treated very fairly but complained loudly enough long enough to get listed.  Complaints are listed regardless of whether they are proven valid.  The longer someone has been in the business the more common it is to have one or two complaints.

What you are looking for is disciplinary action.  Anyone who has been suspended or convicted is done.  Throw away their stuff and never talk to them again.  You have to do something VERY BAD to get your licenses suspended or revoked.  It isn't worth taking a chance on that person.  You can use your judgement regarding other disciplinary action, but my advice would be to steer clear unless everything else is perfect and you can't find anyone else you like. 

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