How to Pick a Great Financial Advisor


Written by Ethan S. Braid, CFA on April 22nd, 2016


The author, a fee-only registered investment adviser with more than sixteen years of experience, manages over $70 million dollars of client assets for high net worth investors.  The goal of the article is to provide consumers with a solid process to select and then evaluate a great financial advisor.





The thought of finding a financial advisor can produce a range of emotions for the average investor spanning from intimidation to relief.  While there are some great financial advisors there are also plenty of salesmen disguised as financial advisors.  Some financial advisors are well educated while others have no education.  Some financial advisors have credentials that require years of graduate level study and add-value while other financial advisors have credentials that nearly anyone can earn with minimal difficulty.  Not all financial advisors are required to act in their clients’ best interest.  According to the Department of Labor, investors receiving conflicted investment advice can expect their investments to underperform by an average of 100 basis points.  Over the duration of the client-advisor relationship, such underperformance can add up to very large sums of money in the form of foregone earnings.  Therefore, finding a true advisor should be the objective of every consumer searching for a financial advisor.  This article will teach consumers a process by which they can find, interview and evaluate financial advisor candidates.  The article will be divided into four focus areas:


  • How to find great financial advisor candidates.
  • Questions to ask during the interview.
  • Items to observe after the interview.
  • How to evaluate the financial advisor after she has been hired.


What Does a Great Financial Advisor Look Like?


Great financial advisors are out there, but they are in short supply.  In my estimation, great financial advisors make up somewhere between 10 – 20% of the army of financial advisors in the United States.  Great financial advisors, will have the following traits and skills:


  • Puts the client first, at all times.
  • Well educated in finance, accounting or economics.
  • Has read numerous books to help develop her own investment philosophies.
  • Experienced.
  • Values of:  loyalty, honesty, fairness, hard work and integrity.
  • Transparent.
  • Follow-through.
  • Fee-only.
  • Passionate about being an advisor.
  • Has a well-defined process for helping clients.
  • Problem solver.
  • Analytical thinker.
  • Positive attitude.
  • Does not sell products.
  • Has no conflicts of interest.
  • Trustworthy.
  • Listens.


How to Find Great Financial Advisor Candidates to Interview – Values Matter.


Looking in the right places is important when searching for something or someone.  For example, if you tried fishing for tuna in Lake Michigan, you can fish all you want, but you won’t catch a tuna!  The same goes for finding a great financial advisor, you need to look in the right places.  I am firmly of the opinion that birds of a feather, flock together.  Consider that statement when searching for your financial advisor.  You want a person who shares your values.  You want an advisor who at a minimum has core values that consist of:  honesty, loyalty, integrity, trustworthiness and fairness to the client.  Shared values and common interests help bring people together.  Who do you know that is honest, loyal, trustworthy, has integrity and is fair?  Chances are that his or her financial advisor has those same values. 


Make a list of the values you are looking for in a financial advisor.  Most likely, a number of those values are your own personal values.  Then apply that initial screen, let’s call it the values screen, to the people in your life who you believe are successful and currently working with a financial advisor.  Examples include:


  • Friends.
  • CPAs.
  • Coworkers.
  • Family members.
  • Attorneys.
  • Your Physician or Dentist.


Once you have produced your list of potential referral sources, ask them, “who is your financial advisor?”


Tough Questions to Ask the Financial Advisors You Interview.


  • How do you get paid?
  • What are your top five most important values?
  • Will you be my fiduciary, on all of my accounts?
  • Do you sell life insurance or annuities?
  • What licenses do you have?
  • Tell me about two planning cases that you worked on where your advice had a significant, measurable impact on the client’s life.
  • What is your education?
  • Are you fee-only or fee-based?
  • Tell me about the books you have read.
  • Describe your investment philosophy.  
  • How did you develop your investment philosophy? 
  • How long did it take to develop your investment philosophy? 
  • Which persons were most influential in the development of your investment philosophy?
  • Can I see your tax return?
  • How do you invest your own wealth?
  • Do you personally own the investments that you recommend to clients?
  • How did you create your wealth?


This list of questions will help you analyze and examine the financial advisor.  Do not be afraid to ask these difficult questions!  You are considering turning your life savings over to the individual.  Given the significance of the decision and the high costs associated with choosing a bad advisor, you must ask these questions.


Any flinching or unwillingness to answer these tough questions are your signals that the advisor is unfit to manage your wealth


Great financial advisors who are confident in the value they offer clients will be more than willing to field these tough questions.  They will immediately respond to these questions in a transparent and straightforward manner.  They will be proud of their process and happy to describe it to you.  A great financial advisor will not be ashamed of her fees and instead will make sure you understand how you pay for her services and why the fees are justified. 


Ultimately, you can consider these questions a way to further analyze the character of the advisor you are interviewing.  Character matters when you are trusting someone with your wealth.  Identifying a solid character can help you separate the minority (true advisors) from the majority (salesmen).  True advisors put their clients first at all times.  Salesmen are looking out for themselves.  Do you want to be advised or sold? 


Items to Observe.


  • Follow through.
  • Trustworthiness.
  • Does the advisor give your case her, “all?”
  • Transparency.


Both before you select a financial advisor and during the asset transfer process after you have selected an advisor, there are certain boxes you will want to check to confirm you made the right choice.  Follow-through helps build trust.  When someone tells you they are going to do something, especially if a deadline is involved, you expect they will make good on their word.  If they don’t, then you begin to question their reliability and trustworthiness.  An advisor who demonstrates follow-through is showing you that he or she is thorough and organized.  Important qualities for someone managing your wealth.


When I speak of the advisor giving your case their “all,” I am referring to the advisor putting her heart into it.  For anyone who played a sport in high school, college or professionally, I am referring to the feeling you had when you left the field knowing that you gave all you had to give.  Like Vince Lombardi said, “leave no regrets on the field!”  Ideally, your advisor works on your case, and all of his cases, with passion, loyalty and commitment. 


Why do I make an issue of the advisor giving your case his, “all?”  There are a lot of advisors who just go through the motions or cut corners.  When it is your wealth and your future at stake, you don’t want your advisor providing you with lip service and boiler plate documents.  You don’t want an advisor who has her assistant build your financial plan and then acts like she did it herself (unfortunately, this is an all-too-common practice).  Going through the motions is a great way to achieve mediocrity at best. 




Evaluating a financial advisor is not always easy.  One problem I see often is that investors mismatch the time horizon of their expectations for returns with the time horizon of the investments in their portfolio.  For example, many times I have met investors who became displeased with their advisor over market losses within the first year of the client-advisor relationship.  At the same time, the investors held long term investments that needed to be judged over seven to ten years and not one year. 


Therefore, setting expectations properly will help to evaluate the advisor’s performance.  For example, when analyzing advisor managed investments, be careful to compare apples to apples and not apples to oranges!  If you have a balanced portfolio, you should not be benchmarking against the Nasdaq and vice versa.  


Ultimately a great financial advisor will have solved your planning problems and shown you a path towards your goals.  A great financial advisor will manage your wealth in a manner that is consistent with your individual risk tolerance.  A great financial advisor will help you grow your wealth at a rate greater than inflation.  A great financial advisor will spend a considerable amount of time asking you questions, learning who you are and listening to your story.


Some questions to think about when evaluating your financial advisor:


  • Was a benchmark set?
  • Do you have the right benchmark?
  • Are you happy with the advisor’s communication strategy.
  • Is the advisor paying attention to your account?
  • Is the path to your goals realistic?
  • Does the planning solution make sense to you?
  • Were your problems solved?
  • Did the advisor ask you lots of questions?
  • Did the advisor listen to you?



Ethan S. Braid, CFA


HighPass Asset Management

800 – 672 - 7916        


About the author of this article.

Ethan S. Braid, CFA is the founder of HighPass Asset Management – an independent, fee-only, registered investment advisory firm with a fiduciary duty to the clients it serves.  Mr. Braid has been passionate about managing client investment portfolios and providing customized financial planning advice since he started working in the investment industry over 16 years ago. Mr. Braid earned a BS in finance from Robert Morris University, an MBA from Cleveland State University and he is also a CFA charterholder.  The CFA program is a graduate level, globally recognized, multi-year program with a focus on investment knowledge.  Candidates for the program commit an average of 900+ hours of cumulative study time to complete all three levels.

Mr. Braid is devoted to being an expert in the field of wealth management for high net worth individuals and families and for many years, has read one book per month on subject areas such as:  estate planning, retirement planning, investment analysis, mergers & acquisitions, business history and behavioural finance.  Mr. Braid has a passion for business history with a focus on the late 19th & early 20th centuries.  To date, Mr. Braid has read 70 books on the subject areas above.

When Mr. Braid is not helping clients, he enjoys: cooking, wine, exercise, his yellow Labrador retriever, fly fishing, hiking, travel, playing guitar, snowboarding and duck hunting.  Mr. Braid is a committee member of the Denver Chapter of Ducks Unlimited.

This article is provided by HighPass Asset Management for informational purposes only.  No portion of this commentary is to be construed as a solicitation to buy or sell a security or the provision of personalized investment or legal advice.