Key takeaways
A financial advisor should feel like a trusted guide by your side, providing critical financial advice at each milestone in life.
When selecting a financial advisor, make sure to pick someone who has the right skill set to meet your needs.
Ultimately, you’ll want to find a financial advisor who you can trust and continue working with long into the future.
As life changes, so do your financial needs. Having a financial advisor who can make recommendations suited to you at any point in time is an important step in reaching your financial goals. But where do you start? How do you choose a financial advisor?
If you’re thinking about working with a financial advisor, remember it will be a relationship that could last many years, if not decades. This person will ideally be with you for years, helping you and your family through each stage of your lives—so it’s important to find a good match.
Of course, establishing this connection is easier said than done, especially because the advisor will get to know the ins and outs of your finances more than anyone else (even your mom). We asked Peter Richardson, CFP®, CFA, vice president of planning excellence for Northwestern Mutual, to give some tips on finding the right financial advisor for you.
Q. What is the best way to pick a financial advisor?
There’s really no “best way” to find an advisor. Meeting an advisor through a referral from someone you know from work, the gym or the neighborhood can be great. Just make sure the person is the right match for you. For example, if you’re a business owner, then you might want to work with someone who already has experience working with business owners and can better understand your situation. If an advisor you meet is not the right fit, they may be able to refer you to someone else in their network who is a better match for you.
Most advisors enjoy meeting new people—that’s part of why they are in the business. An advisor will probably be happy to get a coffee or meet virtually if you prefer. Keep in mind that if you decide to talk with someone you matched with online, you can always ask for client references. You can also research the advisor’s background and experience on a free tool from the Financial Industry Regulatory Authority called BrokerCheck.
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Q. What should I look for when first meeting an advisor?
I think it’s important that an advisor learn about you and what is important to you in your life, as how people think about money is deeply personal—each person has different values and priorities for what to accomplish with their money. The advisor may be able to figure some things out based on your age or life stage; for example, if you’re 26, a gut feeling may tell them that paying down credit is important to you. A good advisor will avoid making assumptions and will ask the important questions to get to know you—and your partner if you have one. It’s also a good idea to bring along some of your financial details to help start these conversations at your first meeting. You get to ask some questions, too!
Good advisors keep track of economic trends that may impact your portfolio. And the best advisors aren’t looking only at your investments or any single area of your finances. They look at your insurance coverage along with your investments. In other words, they should be able to think about growing your wealth and helping you protect it. At Northwestern Mutual, we believe that knowing the big picture of both what you want to accomplish and the risks you face along the way is the best way to do comprehensive financial planning.
Working with the right financial advisor should leave you better off financially and emotionally. They will help uncover blind spots, give you recommendations for addressing those blind spots and growing your wealth, and show you the right actions to take to help achieve what you want.
Social Security is an important part of your financial plan.
Your financial advisor can show you how Social Security will work to reinforce your retirement savings. And they’ll show you how it can help you live the life you want in retirement.
Let's get startedYou worked hard for your money, so you want to get high-quality products. Make sure your potential advisor can sell highly rated and high-performing products. At Northwestern Mutual, we’ve got a complete set of financial solutions, and only our advisors can sell our products.
Q. What is the difference between a financial planner and other titles?
Financial professionals have different titles such as financial planner, financial advisor, investment advisor and wealth manager. One of the main differences is what they specialize in. A true investment advisor will focus most closely on your stocks, bonds and market-based investments to make your money grow. A financial advisor, on the other hand, considers all parts of your financial life, and focuses on how you can achieve your goals. The exact title is less important than finding someone with the right expertise who is required to make recommendations based on your best interests.
Q. How can people tell if an advisor working with them today will still be able to work with them in the future?
Advisors have the responsibility to grow with you. That’s where their continuing education will come in. If I start working with you when you’re a 25-year-old MBA grad, then I know that your situation and your goals are going to get more complex over time. If you own a business 20 years from now and have 75 employees, then I should still be able to help you because my sophistication should have grown along with yours.
Also remember it’s likely you won’t be working with just one person; it might also be all the people who work with that advisor. Your advisor can still be the “relationship manager” while bringing in other people who can help you. That could be for anything from business planning to estate planning to special-needs planning. At Northwestern Mutual, our diverse network of advisors have access to experts all across the country who can team up to get you the best solutions.
Q. Is a good personality match important?
Personality fit is very important. You need to have a lot of respect and trust for each other. Think about what you want. Your advisor should have some empathy, of course, but do you want someone who’s going to be a “tough coach” or someone who will take a softer approach? Even though I know a lot about finances and am a leader at a financial company, I still have my own advisor. I like my advisor to put my situation in perspective for me, and I look forward to our check-ins.
Q. Any other advice?
In the end, choosing a financial advisor doesn’t have to be complicated or stressful. After all, you’ve probably found a dentist, a doctor, and maybe an attorney or tax professional. Just make sure that you trust whoever you choose and that you feel comfortable talking to them. This is the start of a long-lasting relationship that can greatly benefit you for the rest of your life.
