Qualities to Look for in a Financial Advisor

As humans we spend a lot of our lives working. There are varying estimates of exactly how long we may work before retiring, but I think a reasonable estimation is about 40 years—from 25 to 65 years old, totaling over 76,000 hours (40 hours/week x 48 weeks/year x 40 years). With such a massive commitment to one’s career, deciding on the appropriate financial advisor is critical to one’s financial success.

But, how long do you actually spend considering the qualities you would like to see in your financial advisor? Probably not as long as you should. Life gets in the way, and thinking about the proper characteristics of financial advisors may not be the way you want to spend the precious time when you’re not at work.

For my first blog post, I wanted to offer my thoughts on what I feel are the most important qualities to consider when selecting a financial advisor.

Trust Your Gut

This first quality has to do with how you feel about your prospective financial advisor. You should genuinely like him or her and believe that he or she is telling you the truth. People are fairly intuitive.  I read a lot as a hobby as well as to better myself and my business.

One book I have found particularly interesting is Malcom Gladwell’s book Blink, in which the author discusses a psychological phenomenon called rapid cognition or “thin-slicing”. This is the process we use in social interactions to establish first impressions and snap judgements—it’s our gut feeling. We humans use a “thin slice” of information to arrive at a conclusion about someone or something. Gladwell points out that this type of evaluation has served humans well (we don’t have time in our lives to analyze critically everything and everyone we encounter each day). This process can be very accurate.

While your career is likely to span 40 years or more, your retirement will probably last another 20 to 30. Ideally, you want to work with your financial advisor for a long time, a relationship likely spanning decades. Many things occur over such a long period. Outside of family and maybe a few close friends, there are few relationships in life that will last as long as your relationship with your financial advisor.

And, as I point out in the introduction, most people don’t have time to ponder all the ways a financial advisor should conduct business and interact with clients. If your first impression upon meeting a financial advisor is positive, you should trust your instincts and feel confident in your judgement. You are on the right path. However, Gladwell also points out that our first impressions and snap judgement can sometimes mislead us. Here are my thoughts on what else to look for.


Your financial advisor should be a good listener. There is an old (and sometimes worn out) saying that you have two ears and one mouth for a reason—that is the ratio an advisor should use during interactions with clients. He or she should ask a lot of questions, listen to your responses and take copious notes. The advisor should also ask deeper follow-up questions for additional clarification.

Most people just want to feel financially secure, and everyone’s opinion of financial security differs. The question, “What do you want your money to do for you?” demands thoughtful consideration. It is not a one word, sentence or even paragraph answer. It is deeply personal, sometimes emotional, and many people find it challenging to articulate a response. An advisor who is a good listener will be able to help you establish precise goals for your unique situation.


A third quality you should look for in a financial advisor is that he or she should be a good communicator. The financial services industry has a seemingly never-ending array of products, services and fee schedules. Our industry is also extremely jargon-laden. After more than a decade and a half of meeting with clients and prospective clients, I still find myself wanting to use terms like betaalphayield-to-worst and correlation when describing different investments. At the same time, most people in our society couldn’t accurately describe how a mutual fund even works.

Individuals seek out financial advisors because they can’t, won’t or don’t have time to manage their own investments. Many people find markets, money and financial security profoundly stressful. Besides family and faith, money is about the most important thing in peoples’ lives. To compound the stress of money even more, every time you tune into a program or read an article that discusses the financial markets, you will hear terms like crashpanic or crisis.

Good financial advisors possess the ability to explain complicated and often convoluted issues in terms that are understandable to investors. Often times this can have a calming and comforting effect on their clients. Markets will go down from time to time. Politicians will say and do foolish things. An advisor who can give you clear, concise advice during upsetting times is a tremendous asset to their clients.

To be clear, I am not suggesting you choose an advisor who will dish you a line or offer some platitude in order to make you feel good. The ultimate job of a financial advisor is to design and execute plans that will get clients to their goals. There are instances when expectations need to be adjusted in order to accurately reflect a client’s financial circumstances. People tend to be understanding of these adjustments—as long as they are clearly communicated.


A fourth quality you should look for in a financial advisor is one who is process driven. Standard operating procedures, business processes and strategic planning are such buzz words these days that they are almost starting to sound cliché. In the field of financial advising, though, a process is critical.

As I detailed above, money can be very stressful, and the only things you can control with investments is how you are going to make them and how you are going to react to them. I heard a great line once: “Volatility is the price you pay for making money in the stock market.” When markets fall and emotions are high, an established process will be your beacon. Have your prospective financial advisor define his or her processes to you.

Professional Designation

The fifth quality a financial advisor should have is some sort of professional designation. The field of financial advising has a very low barrier-to-entry. There are tests that one must pass (such as the Series 7 exam), but they are not exceedingly difficult. As a consequence of this low barrier, our profession has high turnover.

I started my career at Edward Jones as part of a “class” of new advisors. There were 12 of us. Ten years later, when I left, there was only one person remaining from our original class – that’s a 91.67% attrition rate. Most of those other 10 advisors had left the industry altogether.

Now, compare financial advising to careers in medicine, law or tax. Lawyers and doctors have to take a test before they can even get into their respective graduate degree programs. Then, after several more years of rigorous study, they have to pass a bar exam or a board exam before they can start practicing. The CPA exam is brutally difficult and many CPAs need a couple attempts to complete it. The barrier-to-entry in these fields is very high. At the same time, most doctors stay doctors throughout their entire working lives. It’s about the same for lawyers and CPA’s.

A professional designation like CFP® or CIMA® is an indication that the advisor you are meeting with has been around a while. Many designations require a certain number of years in the financial advising industry, and some even require a certain level of production. An advisor with a professional designation is likely to have experience, an established client base and personal financial stability. In other words, he or she is not likely to suddenly quit and move into a different line of work, leaving you high and dry.

Previously, I pointed out that ideally you will work with your advisor for the next 20 to 30 years or more, even the rest of your life. The advisor’s business stability and longevity are vital to your success as an investor. Additional professional designations are good indicators of an advisor who will likely be around for the long-term.


The sixth quality to look for in a financial advisor doesn’t apply to the advisor. It applies to the staff. Much of what is done in a financial advisor’s office is actually handled by the staff. The financial industry is highly regulated. As a consequence, there is a separate form for virtually everything (this is both a good and a bad thing).

A financial advisor’s job is to give sound advice. The processing of paperwork, sending and receiving money, and sometimes even placing trades, are carried out by the staff. Most advisors will have a least one assistant. You will be working with these individuals a lot. They will obviously be under the guidance and supervision of the financial advisor, but they are not the same person. You want to feel comfortable around them and trust them as well.


The final quality one should search for when hiring a financial advisor is a clear fee schedule. The advisor doesn’t have to have the cheapest fee schedule on the market (preferably it’s not) nor should it be the highest (that’s worse).

It only matters that the fee is

  • (1) understandable,
  • (2) transparent and
  • (3) seems reasonable to you.

It has to be understandable because no one will buy anything without definitely knowing the cost. It has to be transparent because you need to be able to verify the numbers by yourself (if you feel the need to).

Finally, it must be reasonable because no one likes the feeling of being taken advantage of. If one or more of the previous three components are not met, you will most likely not have a good relationship with your advisor. His or her fees will be an ongoing issue.

I hope you enjoyed: Qualities to Look for in a Financial Advisor. I certainly enjoyed writing it.  You are going to spend a great deal of your life working—probably more than 75,000 hours. That’s a TON! I hope that this post provides you will a simple guide you can use to select your financial advisor.

If you would like to discuss this topic or any other topics financial planning, please reach out to me. I’d love to connect with you, and show you our BFS 360˚ Planning process.

Qualities to Look for in a Financial Advisor
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