How to Select and Evaluate a Financial Adviser

Last Updated: June 06, 2013

At some point, as we progress through life, we wake up and discover that our financial situation is not as simple as it once was. It may happen all at once, following a marriage or a divorce, an inheritance or a business opportunity. Or maybe a need appears gradually, as you advance in your career, pay off some debt, and no longer have the time to keep up with things. No matter the reason, we will probably all need the assistance of a financial adviser at some point in our lives. An adviser is normally defined as someone who offers advice either for an hourly or asset-based fee. (This is different than a broker, who offers to place a transaction for a commission but does not offer advice.) But how do you select that individual to be your adviser? Anyone can call themselves a “financial adviser,” but you should rely on the four E’s to make sure you select the right adviser.
Education It is important that your adviser has the academic background to understand your situation, make appropriate recommendations, and help you implement and monitor those recommendations. Your financial plan should include more than just buying 100 shares of your favorite stock. Your adviser must understand investments, but should also have knowledge about retirement planning, tax planning, risk management, and even estate planning. Each of these areas of financial planning can be very complex and are ever changing. You should select an adviser that has chosen to study all of these areas. Furthermore, your adviser should have a commitment to continuing education, by attending industry conferences, college classes, or specialized workshops. Examination One way to know if your financial adviser is qualified to assist you is to review their certifications, many of which require taking (and passing) an examination. There are several different industry licenses an adviser must acquire before they can perform certain functions. There are specific exams that allow an adviser to recommend mutual funds, or stocks, or bonds, or insurance products. Passing other exams could demonstrate knowledge of accounting, or real estate, or commodities. There are also highly esteemed professional designations that require passing an examination. Selecting an adviser that has shown a commitment to education and receiving industry credentials will help make sure they have the competency to assist in your situation. Experience All financial advisers started somewhere. But that does not mean you have to let them practice and learn at your expense. You should expect anyone that is advising you to have been in the financial industry for several years before trusting them with your financial future. There is no substitute for hands-on experience when developing a solution for your individual needs. If your adviser says “I have never come across a situation like this before,” then you may want to find an adviser that has. Because the financial industry is constantly evolving, you do not want an adviser that has never seen a down stock market, a different interest rate environment or legislative changes. Make sure your adviser not only has the education and has passed the required examinations, but that they also have some experience working with others on financial needs similar to yours. Ethics The most important of the E’s is ethics. If you have ever picked up the business section of the newspaper, you have probably read about an adviser with a breach of ethics. There are many entities fighting for the attention of your adviser, but you should expect them to put your interest above all others, including their own interest. It is important to understand how your adviser will be compensated and whether or not they receive compensation from anyone else, such as a fund company, based on the recommendations they bring to you. The stories you have seen may have involved fraud, embezzlement, or money laundering, but your financial adviser should aspire to higher levels of ethics than just avoiding anything illegal. You should expect nothing less than the highest standards of honesty, integrity, and transparency. Now you know what to look for when selecting an adviser; education, examination, experience, and ethics are all paramount in a good adviser. Searching for a Certified Financial PlannerTM is one way to filter out advisers who may not be ready to advise you on your situation. This industry designation denotes a financial adviser that is “Certified” by the CFP® Board of Standards to have the educational background, passed a rigorous examination, a minimum of several years of industry experience, and demonstrated a commitment to running an ethical practice. At Pension Consultants these four E’s are essential components for the advisers who work with our individual clients. Our RetireAdvisers® team only employ Certified Financial PlannersTM or those on track to become a Certified Financial PlannerTM. Your choice is your future! PCI’s archived blog entries are dated, the rules and statutes referenced may have changed. The analysis or guidance within these blog entries may have become stale, dated, or no longer accurate. PCI will not update or change these entries to reflect the latest analysis or development.


Pension Consultants, Inc.



Read The First Chapter

Learn what it takes to build a successful retirement plan so your employees can retire on time and with dignity. A must read for any fiduciary.

We promise to never spam you or sell your information. For more, read our privacy policy or terms and conditions



A good plan measures
three key elements:
investments, and fees.


A good plan serves
employees and


Fiduciaries have a
responsibility to make
reasonable decisions
with their employees’
best interests in mind.

Ready to Evaluate Your Plan’s Performance?

How we can help


Speak with an adviser who can evaluate your plan in the three critical areas.


Understand how your current plan is performing.


Learn what you can do to improve your plan’s performance.