How to Choose a Good Financial Advisor
Looking for a financial advisor is easy, but finding one who actually works in your best interest is harder than it should be. The financial services industry uses the term “financial advisor” loosely. Two people with the title can hold completely different credentials, incentives, and obligations to their clients. One may be legally required to put your best interests first. The other may be paid to recommend products that may or may not serve you. In this guide, I’ll walk you through what to look for, what questions to ask, and how to find a financial advisor you can trust.Are All Financial Advisors the Same?
No, all financial advisors are not the same– and the differences matter more than most realize.
Michael Kitces, a well-known CFP® professional and industry commentator, has written extensively about a common problem in the financial services industry: the title “financial advisor” has almost no legal barrier to entry. Advisors are licensed based on the products they sell, not the quality or integrity of the advice they give.
In practice, that means:
- Two advisors can share the same title while adhering to completely different standards of care.
- Some are paid commissions to recommend certain products – whether or not they align with your goals.
- Credentials vary widely in rigor, meaning, and ethical obligation.
- One bad recommendation can have serious and lasting consequences for your financial future.
Kitces draws a useful distinction between advisors who sell products, and fiduciaries – what he calls “advicers” – who sell advice. The key difference is how they get paid.
Types of Financial Advisor Fee Structures: Commission-Based vs. Fee-Only vs. Fee-Based
A financial advisor’s fee structure tells a lot about their motives. When comparing potential advisors, choose one who has a transparent fee structure. Below are three common structures and what they mean for you as a client:
- Commission-based: Advisors earn commissions when they sell you a product, like specific investments or insurance policies.
- Fee-only: Advisors are paid solely by clients – through a flat fee, hourly rate, or percentage-based fee – for their advising services.
- Fee-based: Despite sounding similar to fee-only, fee-based advisors earn money through a mix of client fees and commissions.
Fee-only advisors, or “advicers,” minimize conflicts of interest by charging only for their services – no commissions or hidden incentives. Their transparent fee structure helps keep their goals aligned with yours.
However, while using the fee-only structure is a good start, not all fee-only advisors are fiduciaries, and that distinction matters for finding someone whose goals align with yours.
What is a Fee-Only Fiduciary Financial Advisor?
A fee-only fiduciary financial advisor is an advisor who is paid solely by their clients and who is legally and ethically bound to place their clients’ best interests first. Working with a fee-only fiduciary eliminates conflicts of interest and ensures your advisor’s advice is aligned with your long-term goals.
The distinction of “fee-only fiduciary” signifies a commitment to maintaining the highest standards in financial advising.
CERTIFIED FINANCIAL PLANNER® Certification – Taking it a Step Further
Many of the most qualified fee-only fiduciaries hold the CERTIFIED FINANCIAL PLANNER® certification. CFP® professionals must meet rigorous training, examination, and experience requirements set by the CFP Board, and must adhere to a strict code of ethics.
When you work with a fee-only fiduciary who is also a CFP® professional, you get fee transparency, fiduciary ethical standards, and the deep expertise that comes with the CFP® certification.
What Questions Should I Ask a Financial Advisor Before I Hire One?
A lot of factors go into choosing the right advisor – trust, strategy, goal alignment, and personal connection.
- What is your fee structure?
Are you fee-only, commission-based, or fee-based?
What to look for: Work exclusively with fee-only advisors. The fee-only structure is the clearest signal that the advisor doesn’t have hidden motives tied to product sales. - Are you a fiduciary?
Do you hold the fiduciary distinction or CFP® certification?
What to look for: Choose an advisor with the fiduciary distinction – they’re legally and ethically bound to act in your best interest. CFP® professionals are also held to the fiduciary standard, as well as rigorous training, experience, and examination requirements. - How do you form your financial recommendations?
What to look for: Choose an advisor who can clearly explain their decision-making processes. Look for someone who makes data-backed decisions and can show how their recommendations connect to your specific goals. - How will my strategy evolve as my life changes?
What to look for: Choose an advisor who conducts regular reviews and meetings – and who adjusts your strategy as life evolves. A one-time financial plan is unlikely to set you up for long-term success.
The right financial advisor will give you straightforward answers to these questions. Before trusting someone with your financial future, make sure their fee structure, background, and processes align with your goals and values.
How to Find a Fee-Only Fiduciary Financial Advisor
Knowing what to look for is the first step. Here is how to put that knowledge into practice.
- Start with Research
Ask friends, family, and colleagues who they recommend. Read Google reviews and peruse advisors’ websites. Look for clear, transparent language about fee structures and fiduciary status. If an advisor’s website is vague about how they’re paid, it’s worth noting.
You can also search verified databases to find qualified advisors:- Fee-Only Network
- NAPFA (National Association of Personal Financial Advisors) – exclusively fee-only advisors
- CFP Board’s advisor search tool – verified CFP® professionals
- FPA PlannerSearch® – members of the Financial Planning Association
- Schedule an Introductory Call
The most reputable advisors offer a no-cost introductory call. This is your opportunity to ask the four questions above and get a sense of how the advisor communicates. A good advisor will welcome direct questions about their fees and fiduciary status. - Verify Before You Commit
Before you sign anything, verify your advisor’s credentials. Then, select the one who demonstrates transparency, expertise, and a communication style you trust.
Find the Right Financial Advisor
The financial services industry includes advisors who truly serve their clients – and those who don’t. The difference isn’t always obvious at first glance, which is why understanding fee structures, recognizing fiduciary responsibility, and asking the right questions matters.
If an advisor avoids your questions, is unclear about fees, or lacks relevant certifications, that’s a strong sign to keep looking. Never settle.
Toberman Becker Wealth is a fee-only, independent fiduciary firm that operates in our clients’ best interests, always. Whether you’re retirement planning in your 50s or retirement planning in your 60s, it’s never too late to start exploring your retirement options. If you have questions about your retirement planning preparedness, feel free to book a meeting or give us a call.
Choosing the Right Financial Advisor FAQ
Despite what you may hear, there’s no secret potion that guarantees a successful portfolio. While there are good starting points like a 60/40 stock-to-bond mix, successful diversification must take your goals, risk appetite, and timeline into account.
Not always. While all fee-only fiduciaries are financial advisors, the reverse isn’t true. The title “financial advisor” is loosely regulated, meaning two people using it may have very different credentials, standards, fee structures, and incentives. When choosing a financial advisor, prioritize the fiduciary standard.
A CFP®, or CERTIFIED FINANCIAL PLANNER,® professional is an advisor who has met rigorous training and experience requirements set by the CFP Board.
This matters because the CFP® certification is one of the strongest signals of expertise and trust in the industry. To earn it, advisors must be trained and tested across 72 areas of financial expertise, accrue thousands of hours of experience, and commit to following fiduciary standards.
A CFP® professional takes a holistic approach to financial planning and is legally bound to act in your best interest, so you can feel confident that their priority is your financial future.
Ask the advisor directly and request it in writing.
You can also ask for links to their membership profiles through:
Fee-only advisors typically charge in one of three ways: a flat annual or monthly fee, an hourly rate, or a percentage of the assets they manage. The right structure depends on your needs and financial situation, but the key is knowing exactly what you’re paying, with no hidden commissions. You can read Toberman Becker Wealth’s fee structure here.
If you’re looking for a fee-only fiduciary CFP® professional in St. Louis, Toberman Becker Wealth would love to work with you. We work with clients nationwide, but most are right here in the St. Louis area. We are proud to be based in St. Louis and enjoy meeting our clients in person. If you’re looking for a local financial advisor you can trust, book a call with us or schedule a visit to our St. Louis office.
Michael is a highly knowledgeable and experienced partner at Toberman Becker Wealth in St. Louis. With his expertise in investment management, behavioral finance, and retirement planning, Michael is dedicated to providing his clients with the best financial guidance possible.
Having worked with clients on complex estate planning and developing investment strategies for a team of advisors, Michael’s experience spans across various areas of financial planning. What truly sets him apart is his unyielding desire to acquire knowledge for the betterment of his clients. At Toberman Becker Wealth, this commitment to continuous learning is the foundation upon which exceptional client experiences are built.
Michael earned a Bachelor of Science degree in Finance and Banking from the University of Missouri – Columbia. Additionally, he holds designations as a Chartered Financial Analyst (CFA) charterholder and Certified Financial Planner (CFP).
Beyond his professional achievements, Michael enjoys a fulfilling personal life in St. Louis. Living with his wife, Lindsey, and their beloved dog, Birk, he finds joy in activities such as golfing together and exploring local restaurants.