How to Find an Advice-Only Financial Advisor

👋 Hi there! We’re excited to help more people understand the benefits of working with advice-only financial advisors. And we want to help connect people to the best financial advisors for their individual needs. If you are an advice-only financial advisor, we encourage you to join our growing community of financial advisors featured on Wealthtender so we can add you to this guide soon. Click here to learn more and get started.

With an advice-only advisor, you, fortunately, do not need to ask them the usual questions you would a typical advisor, such as 1) What hidden fees do you charge?  2) Do you sell products and make commissions? 3) Are you a fiduciary?

You can rest assured that with an advice-only model, you are receiving some of the fairest, most transparent advice available in our industry.  So, the questions you should ask should be tailored more toward your specific situation.

For example, if you have student loans, ask them about their knowledge of student loans and typical strategies for how to tackle that debt.  Or, if you own rental properties, how familiar are they with them, and what recommendations do they usually provide there?  Also, make sure it is a good personality fit, so ask about hobbies, communication style, etc.

– Eric Simonson, CFP®, CRPC®, CLTC®, Abundo Wealth (View Eric’s Wealthtender Profile)

What range of subjects do you work on with your clients? Do those areas of advice align with the needs that you are trying to address? How are your fees determined?

– Andrew Dressel, CFP®, CRPC®, APMA®, Abundo Wealth (View Andrew’s Wealthtender Profile)

I would say that you should get the same, if not more, advice from an advice-only financial advisor than you would from a fee-only or commission-based financial advisor. This is because an advice-only financial advisor isn’t tied to a product outcome.

Traditional Financial advisors use financial advice to drive certain outcomes or products from which they receive a benefit or compensation. The scope of the relationship with an advice-only advisor is based on the depth and breadth of the advice that you get.

– Andrew Dressel, CFP®, CRPC®, APMA®, Abundo Wealth (View Andrew’s Wealthtender Profile)

Every advisor is going to be a little unique in terms of their service offering, but on the whole, you can expect advice-only advisors to be much more comprehensive with their advice since their income is in no way tied to the advice they provide.  So, they are really free to ‘go anywhere’ with their guidance/advice.

– Eric Simonson, CFP®, CRPC®, CLTC®, Abundo Wealth (View Eric’s Wealthtender Profile)

➡️ How Much Does a Financial Advisor Cost? Read the Article

Before hiring a financial advisor, determine what services you need from them. Whether it’s full-service investment management or a plan focused on a specific area of your finances, put together a list of what you’d like help with before contacting an advisor.

Though most people use a financial advisor simply to invest for retirement, this is only a small part of what many advisors offer. Here’s a quick rundown of potential services a financial planner may offer you:

• Budgeting and money management
• Debt management
• Insurance planning
• Retirement planning
• Other investment planning
• Inheritance planning
• Estate planning
• Tax planning

As you can see, financial advisors can help you with your entire financial picture, not just investing. As you start to plan for life’s bigger milestones, you should consider finding a financial advisor that specializes in those areas.

Finding the right advisor can help you minimize risk, maximize gains and take advantage of tax breaks while investing for your future. They can also help you protect your assets with the right kinds of insurance and help you pass on your financial legacy with a proper estate plan.

Once you have a list of services you would like, review the fee structures financial advisors offer. Finding a balance between the services you need and the cost of those services will help narrow down the field of advisors you may want to work with.

If you are looking for a full-service advisor to manage all of your investments, consider searching among fee-based financial advisors. If you want to manage your money yourself, consider the flat fee and monthly subscription advisors for ongoing support.

Once you have chosen the services and fee structure you prefer, it’s time to contact a few advisors and interview them. Here are questions to ask financial advisors:

• What services do you provide?
• What are all the ways you get paid? (fee transparency)
• What is your investment strategy?
• How do you measure investment performance?
• How do we communicate about my plan?

Interview multiple advisors to get a feel for who you want to work with. A combination of fees, services, and customer service will help you determine the best fit for your financial advice.

Once you find an advisor (or two) you feel comfortable with, it’s always a good practice to check their credentials and the firm’s details. You can do this at the Investment Adviser Public Disclosure (IAPD) website. 

You can check both the individual and the firm to view their background and experience details, as well as any disciplinary action taken against them or their firm.

As licensed financial professionals, there is oversight into how financial advisors conduct business, so running a quick (free) check on them is recommended.

For additional information about advisor credentials, read our article to learn the most popular designations held by financial advisors, as well as specialized credentials which may be important to consider if you have unique financial planning needs.