Find fee-only financial advisors who are ready to help with your financial planning needs so you can enjoy life more with less money stress.

Before hiring a financial advisor, it’s important to first consider your own financial planning priorities. In this guide, we’ll share quick tips to help you get started in your search and introduce you to fee-only financial advisors featured on Wealthtender you may want to add to your shortlist.

What is a Fee-Only Financial Advisor?

It is important to avoid conflicts of interest when hiring a financial advisor, but that is easier said than done. The majority of financial professionals are actually salespeople, paid to tout products and services their clients may or may not need. Worse yet, some of those financial products are overpriced, and others are simply unsuitable for the needs of the client.

While there are laws designed to protect financial planning clients, consumer protection agencies say they are often inadequate to the task. If you want to be smart about your finances, you need to take an active interest in the process, and that starts with hiring a professional you can trust – one who is paid to put your best interests first.

Unlike their commission-paid and fee-based counterparts, fee-only financial planners are paid directly by their clients. And since they are not compensated based on the products and services they recommend, they are free to provide expert guidance based on the best interests of the individuals they serve.

That does not mean, of course, that all fee-only financial planners are the same or that just anyone will be suitable for your needs. Some fee-only financial planners have been around for decades, while others are new to the industry. If you want to hire a financial planner who has your best interests at heart and the skills to make it happen, you need to ask the right questions.

Questions to Ask a Fee-Only Financial Advisor

Here are some key questions to ask and things to know when interviewing a fee-only financial planner.

What Are Your Fees and How Are They Collected?

Since you will be paying the fee for the financial planning services you receive, it is important to know what those fees are and how they will be collected. Some fee-only financial advisors require an up-front payment based on time spent and services provided, while others take a percentage of the total portfolio as their only form of compensation.

There are pros and cons to both types of compensation. A flat fee is simpler and more predictable, but you will pay the same amount no matter how well or poorly your portfolio performs. Under this type of arrangement, the financial planner does not have a huge incentive to improve your performance over time.

A financial planner who is paid based on the value of the portfolio has a strong incentive to ensure good performance, but this type of arrangement could entice the planner to ramp up the risk. It is important to discuss your goals and your tolerance for risk when working with this type of financial professional.

How Should I Prioritize My Investments?

An experienced fee-only financial planner will work with you to prioritize your investment vehicles, from your 401(k) at work and your separate IRA account to your emergency fund and short-term savings. It is important to know how the financial planner views these various accounts and what strategies they will use to prioritize their funding.

There are a number of factors to consider when prioritizing investment accounts, and a good financial professional will take them all into account. An experienced financial planner will also recognize that funding priorities change over time – a young worker may prioritize tax-free retirement accounts like the Roth IRA, while an employee who is nearing retirement may put more into a 401(k) account or after-tax savings.

Do You Invest in the Products You Recommend?

Even though they do not directly profit from the products and services they recommend, every fee-only financial planner will have their preferred vehicles. Before you invest with any fee-only professional, you should ask if they put their money where their mouth is.

Always ask the financial planner if they invest in the same products they recommend to their clients. A financial planner who is unwilling to invest in their own recommendations is unworthy of your business – or your trust.

How Do You Determine Your Clients’ Risk Tolerance?

Risk tolerance is a critical subject for every investor and every client of a fee-only financial planner. Unfortunately, it is not always easy for an individual investor to know how much risk they can tolerate or how many paper losses they can take until a market downturn takes place.

That is why it is so important for potential clients to ask how their planners determine the risk tolerance of their clients. A simple interview may not be enough to determine the real level of risk tolerance, and a good fee-only financial planner will always delve deeper. If you want your fee-only financial planner to make appropriate recommendations, he or she needs to truly understand your tolerance for risk.

What is Your Strategy for Rebalancing?

Your investment priorities do not stay static over time – they change and evolve as you go through the various stages of your life. A young person may be perfectly happy with a stock-heavy portfolio, while an older worker nearing retirement may need to take a more balanced approach.

Strategic rebalancing is a key part of successful financial planning, and it is important to know how your would-be advisor plans to handle that process. Always ask the fee-only financial planner how they approach rebalancing and what techniques they use to reap profits and invest in asset classes that are temporarily undervalued.

Do You Keep Up With (and Prepare For) Tax Law Changes?

The tax code is a critical part of the financial planning process, and it is important to know how the fee-only financial planner approaches it. You cannot expect your fee-only financial advisor to moonlight as a tax expert, but you should expect them to have a solid knowledge of the tax code and how it works.

It is especially important for fee-only financial planners to stay abreast of changes in the tax law. This information will help them make smart recommendations to their clients – advice that will help those clients keep more money in their pockets.

When interviewing fee-only financial planners, always ask about their familiarity with the tax code and what changes they are making to their investment recommendations. The answers to these tax questions could be enough to tip the balance in favor of one advisor over another.

If you want to hire a professional who truly has your best interests at heart, it pays to seek out a fee-only financial advisor. Fee-only planners do not suffer from the same conflicts of interest as their commission-only and fee-based counterparts, and that could be good news for you and your portfolio. Now that you know what questions to ask, you can find a professional who is ready to put your interests first.

Get to Know Fee-Only Financial Advisors

📍 Click on a pin in the map view below for a preview of fee-only financial advisors who can help you reach your money goals with a personalized plan. Or choose the grid view to search our gallery of financial advisors with additional filtering options.

Expert Insights: What are the Benefits of Hiring a Fee-Only Financial advisor?

Smart Tips for Finding a Financial Advisor

Before hiring a financial advisor, here are a few quick tips to help you find the best advisor for you.

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