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Financial Advisor: How to find one you can trust! - YouTube
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you've decided it's time for you to
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finally hire a financial advisor
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what's the best way to find a good one
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there's a ton of advisors out there
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and pretty much anyone can call
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themselves a financial advisor
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in this video i'll show you how you can
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find
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a financial advisor you can trust
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together we'll explore three ways that
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you can personally use
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in your search again this is the second
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video of a three-part series on
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financial planners
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and at the end i'll give you a bonus tip
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where do we all turn to
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if we're looking to find an answer to a
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question
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where else but google so let's see what
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we can find there
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go let's see what you got i'm gonna type
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in
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financial advisor near me which
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i just learned is the most popular term
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that people use to find a financial
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advisor and let's see what we find in
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here
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mary price edward jones and another
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edward jones
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advisors the first thing that i notice
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here
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is these top three are big box firms
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which are typically broker dealers so
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remember from last time we said that
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we're looking to find
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a fiduciary again fiduciaries are
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financial advisors who will act in our
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best interest so
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let's see if broker dealers are
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actually fiduciaries
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and let's go to this sec website
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all right so seen here
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that the legal standards are actually
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different investment advisors
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broker dealers those are the two main
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types of financial advisory firms
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if you're working with a financial
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advisor they're acting as a fiduciary
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but broker dealers are subject to a
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different set of standards
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so it looks like we don't really want to
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work with
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broker dealers we're going to try to
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find a fiduciary
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if you're interested in just knowing
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what to avoid if you're looking for the
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fiduciary so let's just google top
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record
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in the us and
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see over here that essentially the top
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ones that you might
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end up seeing your search are all of
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these broker dealer firms
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so if you're looking for the fiduciary
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that's probably not what you're looking
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for
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the other thing that i'm noticing here
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is
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credentials so some advisors will not
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have credentials
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this one is a cfp so that's good
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speaking about credentials
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if we want to find one that has
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good credentials like a cfp or an afc
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one of the best ways to find
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cfp advisors is the cfp board let's just
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go straight to the source
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cfp board is the one that oversees the
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cfp designation
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and here in this website cfp.net let's
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click on find the cfp professional
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and we can type in a zip code
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here i'm based here in washington dc so
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i'm going to type in a dc
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zip code so the first thing that you'll
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see in here
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is the minimum investable assets that's
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one of the criteria of some financial
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advisors
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and again you might see in here that
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some of the firms that will show up here
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are broker dealers so maybe you want to
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skip that
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really high minimum investable assets
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usually again
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most advisory firms will target retirees
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or new retirees that have like one to
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two million so it's
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not uncommon to find this type of
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minimum and
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scroll down again high minimums
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broker dealer broker dealer up
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here i am um we we work primarily with
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male upper middle class in their 30s and
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40s so we don't really require
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minimum investable asset that's just
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part of our mission and so
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basically you can just scroll down here
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and see which one
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resonates with you well there's a lot of
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broker dealer firms in here
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so if you see this type of firm that's
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the second type of
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advisory firm investment advisors
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they're probably fiduciary so you can
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ask them
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if they really are broker dealer there's
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probably an investment advisor
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might be worth checking out and so on
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and so forth
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really just want to find the fiduciary
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the best website
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for that is napfa
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so napfa stands for the national
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association of personal financial
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advisors
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let's go to the about section so
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it says in here that napa is the
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country's leading
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professional association of fee only
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advisors it's
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that's not a great term but that's the
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one that the industry uses
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which means that if you say fee only
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they are committed to working in your
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best
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interest and okay interesting they were
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founded back in 1983 because a group of
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advisors
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didn't want that conflict of interest
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that arises when you
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get a commission out of an advice or
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product that you're recommending
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so let's go ahead and see what the
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interface looks like so you just click
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on find an
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advisor type in a zip code again i'm
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based in dc so i'm typing in a dc
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based zip code and you can see the ones
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that 15 or 17 firms that come up here
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and then you can just essentially
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check out their website margery here is
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a cfp so that's a good sign
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if a cfa here is another designation
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that you want to
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look out for it's very rare that someone
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has a cfp and also has a cfpa cfa
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if you're not familiar with that
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is the most recognized designation on
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investments
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so if you have someone
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that has a cfa they know what they're
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talking about when it comes to
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investments
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and here yeah okay so usually you can
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just visit a website and just
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send an inquiry here through the napfa
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portal
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and where is my firmware okay we're all
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the way down here
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district capital management
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and as you can see i
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am a cfp and a cfa and
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that's pretty much it now it can be
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kind of overwhelming as you can see in
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here you've sort of found
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a good pool of potential financial
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advisors that you might want to work
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with
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because they're all fiduciaries here and
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a lot of them will
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have cfp designations but
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this is like 15 or 17 advisors so
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how do you narrow it down
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well one is you can compare the cost
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because you all know that they already
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have good designations
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and this is essentially the bonus tip
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that i'd like to share
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we have done the research for you so
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we picked a sample of those firms that
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come up at least in the dc area
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and as you can see in here the annual
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fee
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that most of these fiduciary financial
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advisors
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will range from around 3 000
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to around 5000 so that's pretty much
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what
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you'll expect so that's gonna be around
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250
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to like 400 or 500 a month
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some of them will charge some upfront
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fees
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to create the plan some of them that's
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included in the annual fee
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some of them might have additional
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charges for
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assets being managed
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let's say you've narrowed down your
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options to three advisors
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after scrolling through the websites and
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picking the ones that resonate with you
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what questions should you ask them
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during your interview with these
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potential financial advisors
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we cover that in our next video
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