Where to find a financial advisor who won’t ruin your life
A bad financial advisor is likely to ruin your life, and should be avoided at all costs. Having said that, the question remains: how do you find a good financial advisor who won’t ruin your life?
Here are some places where you can look if you are seeking fee-only financial advice, or if you specifically want to work with an advice only planner, a flat fee advisor, or an hourly planner.
But first, a little background.
Hello! I am Bryan Huhn.
As a financial advisor for mid-career professionals and pre-retirees, both here in Dallas, TX and across the country, my goal is to help high earners turn their paychecks into assets, and those assets into supplemental income that grows over time. So they can pursue more freedom, fulfillment, and impact in their lives.
Please sign up for my newsletter if you’d like to receive monthly tips on this topic.
And also…
Here are some blogs we’ve written on this, which you may wish to read.
Investing for Peace of Mind and Long-Term Success
What is Enough? And Why Knowing is the Path to Financial Freedom
Now let’s get on with it!
#1 IAPD
The IAPD is the Investment Adviser Public Disclosure website. It is a website created by the Securities and Exchange Commission. Here you can find out a financial advisor’s regulatory history.
You can search for advisors in your area, and see if they are a fee-only advisor, a dual-registered advisor, or a strictly commission broker (the latter being unacceptable to work with, by the way).
Go to the “Individual” tab
Type in your zip code on the far right
See the advisors who come up.
Under each name, there should be a little box that pops up. This is how you’ll know if an advisor is a fee-only advisor or a commission-earning broker.
If you see “IA,” this means they are a fee-only investment advisor. And they operate under the SEC fiduciary standard. Consider this a green light to explore working with this advisor, but still conduct thoughtful due diligence.
If you see “B,” this means they are a commission-earning broker. And they do not operate under the fiduciary standard. This means they are unacceptable to work with.
Be wary of those that have both designations. This means they can act in both capacities, so they are not a true fee-only fiduciary adviser. And they are unacceptable to work with.
#2 Fee-Only Network
Fee-Only Network is a directory which claims to have only fee-only advisors. It is a great place to look if you want to find a fee-only advisor.
MANDATORY CROSS CHECK: But still, you never know. Advisors change their business models all the time, and they may not report to the directories in a timely fashion. There may be “two hat” advisors or insurance agents on here.
So, I would make sure to vet any advisor you find in this directory vs. the IAPD (see above) and state insurance commission directories. You’d have to do your own research and make sure they aren’t taking commissions or selling insurance policies, which would render them an “unacceptable financial advisor.”
#3 XYPN
XYPN is a directory of fee-only advisors.
MANDATORY CROSS CHECK: But still, you never know. Advisors change their business models all the time, and they may not report to the directories in a timely fashion. There may be “two hat” advisors or insurance agents on here.
So, I would make sure to vet any advisor you find in this directory vs. the IAPD (see above) and state insurance commission directories. You’d have to do your own research and make sure they aren’t taking commissions or selling insurance policies, which would render them an “unacceptable financial advisor.”
#4 Advice only network website
Advice Only Network provides a directory of advice-only planners. However, the advisors in this directory paid a fee to be listed here. This is by no means a comprehensive listing of all advice only planners, because it only includes those who paid to be listed.
MANDATORY CROSS CHECK: Make sure you check their Form ADV, though, to ensure that they aren’t charging AUM fees. Sometimes they can morph their businesses. If you are looking for an advice only planner specifically, you’d want to make sure you verify how they are charging because some of them use these terms very loosely.
#5 Flat fee advisors websites
Here are two websites providing lists of flat fee advisors.
Please note, like Advice Only Network, these are by no means a comprehensive listing of all flat fee advisors, because they only include those who paid to be listed.
MANDATORY CROSS CHECK: Make sure you check their Form ADV, though, to ensure that they aren’t charging AUM fees. Sometimes they can morph their businesses. If you are looking for a flat fee advisor specifically, you’d want to make sure you verify how they are charging on their Form ADV, because some of them use these terms very loosely.
#6 Garett Planning Network
Garrett Planning Network has a directory of financial planners who charge an hourly, flat, or AUM fee.
MANDATORY CROSS CHECK: Make sure you check their Form ADV, though, to ensure that you understand how they are charging. The GPN directory lists out advisors who charge AUM fees, so if you are looking for someone who only charges hourly, you’d want to confirm that on their Form ADV.
#7 NAPFA
This directory of financial advisors from NAPFA, the National Association of Personal Financial Advisors, gets an honorable mention. I wouldn’t really trust it that much which is why it’s so far down on my list.
However, it is not a great resource because they allow advisors to be in their directory even if they are registered insurance agents who accept commissions, as long as they are under a limit deemed appropriate by NAPFA, and they donate the commission instead of taking them for profit.
See, they explain it here in their membership standards.
Meh.
It’s better than nothing, but I would make sure to vet any advisor you find in this directory vs. the IAPD (see above) and state insurance commission directories. You’d have to do your own research and make sure they aren’t taking commissions or selling insurance policies, which would render them an “unacceptable financial advisor.”
#8 Word of mouth
You always want to get more than one recommendation, so don’t just go with the person that your friend from church works with. Interview at least five different advisors.
If you ask around and come up with some names, make sure you check them using the IAPD site to determine if they fall into the “unacceptable” category or not.
Putting it all together
Thanks for reading this blog clarifying how to find a good financial advisor.
Just for the purposes of full disclosure, I might be slightly biased on this topic because I am a practicing fee-only financial advisor. But nonetheless, if you are seeking to work with someone like me, here’s more about how I help people.
As a flat fee advisor, we don’t earn a fee based on the amount of assets you have with us. Instead, we charge a flat fee that is based on the amount of resources and time required to serve you. This is very different from how most other advisors operate. If you’d like to discuss how we can help you with your finances, let us know.
Thanks for reading!