How to Choose a Financial Advisor

Use this simple checklist to find the right coach for your investment decisions.

Sheryl Rowling, CPA 9 August, 2022 | 1:52AM
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Choosing your advisor may be one of the most important financial decisions you make. Your advisor will be your partner in making financial decisions and choosing your investment strategy. Many people call themselves financial advisors, financial educators, or financial planners. Yet, not all financial advisors are created equal! Let’s take a look at how to find the right advisor for you.

Start With a Fee-Only Advisor

The first rule is to screen for a fee-only advisor. Why? Because then you know you have an advisor that puts your interests first. A fee-only advisor is not a stockbroker or insurance salesperson. A fee-only advisor does not get commissions, earn kickbacks, or receive any other type of hidden compensation – and this is important.

Financial planners who have a financial stake in their recommendations to a client face an inherent conflict of interest and cannot be considered objective and unbiased. This can be true even if planners truly believe they have only the best interests of their clients at heart.

Unfortunately, the vast majority of financial advisors in Canada are sellers of financial products. Some or all of their income may depend upon their ability to steer their clients to a limited number of the thousands of financial products available today. These advisors can include stockbrokers, analysts, insurance agents, and financial planners. Many of their clients are not aware of their advisors’ dependence on selling products, or do not recognize its difference.

In the United States, NAPFA believes that many of the problems that beset Americans today in their financial affairs—including the mismanagement of debt, failure to protect retirement assets, and poor allocation of savings and investments—relate directly to the conflicts of interest that pervade the marketplace. Anecdotally, Canadians face similar issues.

Use This Financial Advisor Checklist

What else should you look for in a financial advisor? I recommend the “4 Cs”:

  • Competence: Check for experience, education, and reputation.
  • Compensation: A fee-only advisor will not be motivated by commissions.
  • Credentials: Choose an advisor who is certified. Look for credentials such as a Certified Financial Planner or a Certified Public Accountant/Personal Financial Specialist.
  • Comfort: You will be trusting this person with your financial future as well as your goals and dreams. Make sure you feel comfortable talking to your advisor and that you feel like your advisor really listens to you! The comfort factor is at least as important as the other factors. Not only do you need to feel listened to, your advisor should be available to you as needed, communicate frequently, be responsive to your calls and emails, and explain strategies in a straightforward manner.

Finally, know that any decision you make does not need to be forever. If you no longer feel as comfortable or confident with you advisor as you did previously, it could be time to find a new advisor. Don’t hesitate or feel shy about changing. After all, it’s your financial security at stake.

This article was originally written for a U.S. audience and was published on


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About Author

Sheryl Rowling, CPA  Sheryl Rowling, CPA, is head of rebalancing solutions for Morningstar and founder of Rowling & Associates, an investment advisory firm. She is a part-time columnist and consultant on advisor-focused products for Morningstar, and she continues to actively work in the advisory business. Morningstar acquired her Total Rebalance Expert software platform in 2015. The opinions expressed in her work are her own and do not necessarily reflect the views of Morningstar or of Rowling & Associates LLC.

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