Whenever I read “advice” about how to find an advisor, I’m reminded of the adage that “all roads lead to Rome.”  The authors of these posts are often advisors.  The qualifications they extoll always seem to lead to “give me a call.”

I don’t have this conflict and can be more objective.  Here are my tips for finding an advisor.

Do you need an advisor?

If you are starting your investment journey and don’t have significant assets, you may not need an advisor.  My recommendation would be to open an account with Vanguard and consider whether one of its Target Retirement Funds or LifeStrategy Funds is suitable for you.  It may be the only investment you need.

Financial planning options

Many investors require financial planning.  As investing has become more of a commodity, most advisors offer comprehensive financial planning services.  Typically, they incorporate these services into a bundled fee, based on the amount of assets under management.

There’s another option for investors who aren’t comfortable paying a recurring, bundled fee.  Many members of the Garrett Planning Network offer financial planning for an hourly fee.  Some of these members don’t sell any investment products, so their advice is totally objective.

If you are interested in researching the qualifications of these advisors, go to this link.

Robo Advisors

Many robo-advisors provide sound investment advice at a very low cost.  Some offer access to an advisor.  Others are automated only.  For a list of top robo-advisors, with a description of their services and fees, go to this link.

Full service advisors

Here’s advice that will save you a boatload of money and spare you from enormous grief and aggravation:

Don’t use any advisor who isn’t a “fiduciary.”  All registered investment advisors are required by law to be fiduciaries.  Brokers are not.  Here’s an easy litmus test:

Ask your advisor to send you a written communication confirming the following: In all my dealings with you,  I agree to disclose all conflicts of interest and to always put your interests ahead of mine and my firm.

Every registered investment advisor should be willing to send you this confirmation.  Very few brokers will do so.

An easy way to do due diligence

I speak to hundreds of advisors every year. I am particularly impressed with advisors authorized to place their client’s money with Dimensional Fund Advisors.  You can find a list of Dimensional authorized advisors in your area here.

Of course, there are many other registered investment advisors who do right by their clients.  You can find a list of advisors who agree to the high standards of the best practices promulgated by the Institute for The Fiduciary Standard here.

Finally, advisors who are CEFEX certified also adhere to very high standards of professionalism and always place the interest of their clients first.  You can find a list of these advisors here.

Resource of the Week

You will be a sophisticated consumer of advisor services if you read this paper, issued by The Institute for The Fiduciary Standard.

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