Close this search box.

Mistakes to Avoid When Hiring a Financial Advisor

Finding qualified, independent financial advice can be difficult. With so many people claiming to be financial planners, financial advisors, financial counselors, wealth managers, how do you avoid making a mistake?

Hiring an Advisor Who Is Not a Fiduciary

A fiduciary is an individual who is ethically bound to act in another person’s best interest. This obligation eliminates conflict of interest concerns and makes an advisor’s advice more trustworthy. A fiduciary standard differentiates how most “financial advisors” work with their clients. Over 90 percent of them are paid (fully or partially) by commissions. They promote self-serving products and services to maximize their income placing the company they work for before their clients.

Hiring the First Advisor You Meet

While it’s tempting to hire the advisor closest to home or the first advisor you speak with, this decision requires more time. Take the time to interview at least a few advisors before picking the best match for you.

Choosing an Advisor with the Wrong Specialty

Ask what services are offered, and if they match your needs. Specifically, does the financial planner offer only investment guidance, financial planning, or both. Some investment advisors tailor a portfolio to each client’s specific situation, others simply provide a template investment plan that is applied to each account not taking tax efficiency into account.  Total Wealth tip:  Taxes are most often overlooked because the advisor doesn’t have the knowledge or experience.

Not Asking about Credentials

There are literally hundreds of professional designations and licenses in the financial planning industry. Some financial advisors have licenses such as the Series 7 which allows them to sell specific securities and insurance products. But only a few truly indicate a professional’s ability, or come from outside governing bodies that require continuing education, experience, or oversight. Such as the Certified Financial Planner (CFP®), Certified Public Accountant (CPA) designations.

Not Understanding How and What You are Being Charged

Some advisors are “fee only” and charge you a flat rate while others charge a percentage of your assets under management. Some advisors are paid commissions by mutual funds, a serious conflict of interest. If the advisor earns more by ignoring your best interests, do not hire them.

At Total Wealth Planning we help our clients every day answer these important and at times stressful questions. Who’s helping you?

Financial planning is complex and requires the guidance of a trusted and experienced advisor, such as a fee-only Certified Financial Planner™ (CFP®), who plans comprehensively, and with a complete understanding of your particular concerns and goals in life.

For more information about the financial planning strategies we utilize, please visit us at or contact directly Rob Lemmons, CPA, CFP® at 513-984-6696.

Share this page on: