Selecting a financial planning advisor is a major decision. After all, you’re entrusting your hard-earned savings to them. Here are some criteria to use when looking for a financial planner.

What Criteria Should I Consider When Choosing a Financial Planning Advisor?

Look for a Certified Financial Planner

There often are few laws dictating who is able to call themselves a financial planner. In many cases, almost anyone can. As a result, considering a professional’s certifications becomes especially important, for it’s these that distinguish financial planning advisors.

When comparing financial planners, you’ll likely notice that advisors list many different certifications and credentials. The most important one to look for is “certified financial planner,” or “CFP” for short. CFPs have all been approved by the Certified Financial Planner Board of Standards, which requires certified professionals to:

  • Pass an extensive exam on personal finance
  • Commit to meeting continuing education requirements
  • Agree to the organization’s code of ethics

While other credentials may be helpful, it’s the CFP credential that’s upheld as the industry’s gold-standard.

Find Out How a Financial Planner is Compensated

Finding out how a financial planner is compensated not only helps you understand how much you’ll have to pay for their services, but it also can shed light on their own motivations.

Most financial advisers are paid via one of two methods (or a combination of the two). Some collect a commission when specific transactions (e.g. purchasing or selling investments) are made. Others charge a flat fee for their services, regardless of how many transactions are conducted. (Such a fee is typically expressed as a percentage of a client’s portfolio, with minimum charges if a client doesn’t have too many assets.)


You may not want to limit your search based on this one criterion, for there are good financial advisers who collect commissions from transactions and good ones who work on percentage-based fees. Once finding out how a particular advisor is compensated, though, you should follow up to make sure their fee structure is compatible with your goals and situation.

If they receive commissions from transactions, how do they ensure they’re always acting in your interest rather than their own interest? If they charge a percentage-based fee, is your portfolio large enough to justify that fee? Both of these are fair questions to ask when interviewing advisors.

Select an Advisor Who Serves Clients Similar to You

If possible, seek out a financial advisor whose clients’ financial situations are similar to yours. This will help ensure they’re sensitive to your financial goals and needs, as people in similar financial situations often have common hopes and potential pitfalls.

Most financial advisors won’t discuss specific details of their clients’ portfolios. You should be able to ask what their clients’ average portfolio size is, though. Try to make sure yours falls within the average range of a planner’s clients.

Meet with a Financial Planning Advisor to Talk

After finding an advisor (or a few) in who meets the above three requirements, schedule an appointment to come to their office and talk with them. Sit down together, and discuss where you are and where you’d like to get to. They’ll probably explain how they can help and possibly even make a few recommendations, but try to listen for more than a sales pitch.

Ask yourself whether they’re truly listening to what you have to say, and go with the financial planner who does listen. Any financial planning advisors who meet the other criteria should have the expertise necessary to provide wise advice. The advisor who listens will be able to adapt their advice to your specific hopes, concerns, and dreams.