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How to Find the Best Financial Advisor Near You
If you’re hoping to find the best financial advisor near you, there are several vital issues you will need to think about or become aware of before deciding on who that person is. Finding the best advisor for you is not as simple as typing “financial advisors near me” into a search engine and then clicking on the first result. Not even close.For ultra-high net worth individuals with $10 million and more in liquid assets, we recommend going through our exclusive guide on how to find a financial advisor.
Pillar Wealth Management offers wealth management services that include financial planning, investment management, tax minimization, portfolio planning, and more. We work exclusively with individuals having $5 million to $500 million in liquid assets. Click here to book a free consultation session with us.
First and foremost is, what does “best” mean? And, does being the best financial planner have anything to do with their location?
This article will unpack these and the issues listed below in great detail. We’re doing this because deciding on which financial advisor to work with is probably the second most important relationship you will ever choose to have in your life, right behind your spouse.
Is that a surprising statement?
Consider this: Many investors work with the same financial advisor for decades – longer than they will work at most of their jobs. And money is one of the essential things in life. Learning how to grow it, manage it, use it, and protect it is something everyone needs help with, and it doesn’t get more comfortable with age. Your financial advisor will play an exceptional role in your life and maybe with you for many years. Kind of like a spouse.
So with that in mind, let’s look at how to identify the best financial advisor for you, who may or may not be near you.
Table of Contents
- Pros and Cons of Working with Financial Advisors Near You
- Finding the ‘Best’ Advisor
- Understand the Types of Financial Advisors
- Investment Management Advisors – Retirement Specialists
- Know How Financial Advisors Are Compensated
- Use Search Engines to Screen for Criteria
- Questions to Ask a Financial Advisor Before Hiring Them
- The Benefit of Hiring the Best Financial Advisor Near Me
Pros and Cons of Working with Financial Advisors Near You
You want to find the best financial advisor, but you may also feel like their location should be close to yours, at least in the same state, if not the same city or county. But – does location matter?
Local Advisor Advantages
There are some advantages to working with a local advisor. Here are a few:
First and most apparent, you can meet them in person. If you envision needing to sit in the same room for multiple meetings, proximity would be convenient for everyone.
Furthermore, if you have any interest in working with a financial consultant who also has expertise in real estate investing, business investing, or startups, it might benefit you to work with someone who knows the local markets to some degree. Also, a financial planner near you will have more in-depth knowledge of the state and local tax laws. Depending on your situation, there are some benefits to gain from having a financial advisor near you.
Non-local Advisor Advantages
That said, there are several reasons the location doesn’t matter and may limit your options.
With technology today, meeting online is pretty much just as easy, if not more comfortable, as meeting in person. So the idea of needing to ‘look them in the eye’ doesn’t require a local advisor like it would have even ten or twenty years ago. And with the coronavirus lurking around for the foreseeable future, maybe virtual meetings are the better option, even if your advisor is local.
Furthermore, if you think that looking someone in the eye and shaking their hand helps you trust them better, it’s not necessarily true. Hucksters and scammers succeed in part because they have learned how to communicate and win the trust of people who want to believe in what they’re selling. And when it comes to advisors, this is easier in person.
The truth is, trusting your financial advisor doesn’t have anything to do with meeting in person. It has to do with their ability to listen, and then to create a 100% customized plan that you have high confidence will help you achieve all your goals and desired lifestyle outcomes.
Furthermore, you can get all your investment performance updates through email. And your money will be held in custodial accounts that are national. Pillar uses Fidelity as our accounts custodian. (If you’re not sure what this means, we’ll elaborate on it more later. For now, the point is that your money isn’t held locally. Thus the location of the advisor isn’t relevant to the process).
So, given a choice between the ‘best’ advisor, however that gets defined, and an advisor near you even if they aren’t the best, which would you pick?
In most cases, we recommend favoring expertise and experience over the location of anyone you consider going to for financial advice.
To learn more about this, click here to arrange a free consultation with our wealth managers.
Finding the ‘Best’ Advisor
So, how do you find that best wealth management advisor near you or not?
One way to is to use the resource to the right, the most authoritative exploration into how to find the best financial advisor. It is free and highly recommended, especially for investors with a high net worth or ultra-high net worth.
For now, just keep reading. You’re in the right place!
What does ‘best’ mean, when looking for a financial advisor? Put simply, the best financial advisor for you is someone with three core qualities:
1) They align well with your life situation
2) They are trustworthy
3) They are exceptionally skilled in the ways you need them to be
For instance, if you have high net worth or ultra-high net worth, you need an advisor specializing in your market. Your needs are unique. Your expectations are different. An advisor trying to be all things to all people isn’t going to provide the service you want. A big bank or large brokerage firm won’t offer the personalized service or 100% customized planning you need.
But that’s just one type of advisor, also known as a wealth manager. Let’s look at some others.
Understand the Types of Financial Advisors
An ultra-high net worth financial advisor caters to one group of investors and families. Here are some other qualifications to help narrow your search:
Independent or large firm?
Financial consultants and advisors at big banks are working for someone else in addition to you. They have quotas to meet, products to sell, commissions to make, and stockholders to please. You are not their only concern. Big banks sometimes feel safer because they are known brands. But in reality, they are often less safe. Why? Three reasons:
1) Less experienced – by and large, most big bank advisors are less experienced, because they hire more people right out of college
2) Conflicts of interest – they put their company’s interests before yours
3) Less trustworthy – their track record demonstrates lower levels of trust, as seen in numerous scandals, lawsuits, fines, and in some cases, complete shutdowns (Lehman, Washington Mutual)
In contrast to large firms, an independent financial planner will not be bound by sales targets, and in most cases, can offer a more diverse set of investment options, since no one is whispering in their ear after you leave the room. Independent advisors can offer more excellent protection and better service – see six ways
Fiduciary or non-fiduciary?
There are many ways a non-fiduciary financial advisor can cost you and even hurt you financially. We’ll discuss these more later when we talk about fraud and how to find professional financial services you can trust.
A non-fiduciary has much more freedom to offer products and recommend solutions that may not be best for you, though they may generate commissions or higher pay for the advisor.
The point for now is, a financial advisor who is both independent AND a fiduciary will provide a very different experience than one who has just one, or neither, of those qualifications.
Here are some other titles of various financial advisors, and how they align with the terms just discussed:
Investment Management Advisors – Retirement Specialists
This type of advisor is now held to the Department of Labor’s fiduciary standard. They must disclose fees, and any conflicts of interest, and cannot recommend products that conflict with other investments in your retirement account.
Fee-Only Financial Planners
These tend to be independent advisors, so they can voluntarily bind themselves to the fiduciary standard or not. The surest way to find out is simply to ask them. These types of advisors charge flat fees, or a fee based on a percentage of assets under their management. They do not accept commissions. Pillar charges a percentage-based fee, with a sliding scale as the amount invested increases. We also require a $5 million minimum.
Also regulated by the Securities and Exchange Commission, these advisors do not have to be fiduciaries either, but are bound by the suitability standard, a much more relaxed guideline. Broker-dealers tend to charge commissions, so they will often recommend products or other investment vehicles that benefit them as well as (hopefully) you.
These and other specialists, like tax accountants, are not held to a fiduciary standard.
There are many other terms, acronyms, and designations, and it can become kind of messy to keep up. Keep reading to learn how to narrow down your choices from the multitude of options.
Seek a Financial Advisor with a Top Reputation
This is harder than you might think, because financial advisors are not allowed to be reviewed based on the investment performance of their clients. Without this kind of authoritative first-hand information, how can you be sure who really knows their stuff?
One of the simplest and most effective ways is simply to examine their website.
If a financial advisor has a tiny website with just a few pages, that’s an indication they aren’t investing a whole lot of time or money in their business. Anyone can just throw up a website.
Contrast that with an independent financial advisor, like Pillar, who offers a wide array of resources, detailed clarity about their services, values, and investment philosophies, and multiple ways to engage with them. With so much information, you can have a clear picture of their reputation and trustworthiness before you even talk to them.
Putting up a robust and authoritative website is expensive and time-consuming. Few if any disreputable advisors have the stomach for it.
Another way to assess an advisor’s reputation is simply to reach out to them. Test the waters.
Any advisor who doesn’t get back to you promptly – within 24 hours at the latest – should be viewed with a little less confidence. You might extend that time a little if you email them late Friday night…
Reputation also is demonstrated by expertise, and expertise is demonstrated by authorship. If your financial advisor has produced books or other authoritative written works, you can have greater confidence in the strength of their reputation and service. You will do even better if you read them.
Below you can find our most authoritative book on The Art of Protecting Ultra-High Net Worth Portfolios and Estates – Strategies For Families Worth $25 Million To $500 Million.
You can also check out our guide that explains how we achieve investment performance for our clients.
You can also visit sites like Guidevine, which allow you to search for financial advisors by zip code (if location matters to you). Here’s our Guidevine page.
Be a little less enthusiastic about sites that try to rank the best financial advisors. Most of these sites, if you look at their criteria, base it primarily on the amount of assets under their management. Naturally, then, all the biggest banks and huge brokerage firms, like Raymond James, Wells Fargo, and Schwab make these lists.
The problem is, few of these huge firms are fiduciaries or independent financial consultants. They have a lot of assets because of their size. They don’t specialize, and they don’t provide customized or what we call ‘white glove’ service.
But they do often have a lengthy list of fines, scandals, and abuses. Wells Fargo made the news, again, not long ago for creating false client accounts and causing all kinds of trouble. When it comes to money and financial planning, size does not imply skill or trust. It just implies size, meaning they’ve been around a while.
We’ll show you a bit later some ways to verify the credentials and complaint history of any independent financial advisor.
Know How Financial Advisors Are Compensated
Before working with a personal financial advisor, get clear on their fee structure. There are many, many ways this can be done.
Here are the three basic categories for financial advisor fees:
Fee Only Financial Advisors
Fee-only can include three varieties – one-time flat fees, hourly fees, and percentage-based fees such as what Pillar charges. Which is better? It depends on what you are expecting from your financial advisor.
The main issue to consider is, do you see this as being an ongoing relationship? Knowing your life situation and finances will be changing continuously, and that what matters to you today probably will be replaced by other concerns ten and twenty years from now, do you want to pay someone one time for a plan and then put it into play yourself? Or, do you want to entrust your financial serenity, retirement, and the enjoyment of your life to the ongoing help of a professional?
No matter what plan any advisor creates for you, it will be obsolete within ten years, if not sooner. Your life situation will continually change. So, if you choose a one-time fee type of advisor, you will have to return to them, or someone else, down the road. If your finances and investments are fairly simple but you just want a little guidance every few years, this approach makes sense.
Hourly advisors offer a middle ground of sorts, because you can go to the advisor when you feel like you need their help, and then manage your finances yourself in the interim.
The percentage-based approach is for sophisticated investors who know they need ongoing assistance, and for those who don’t have time or interest to grow and protect their wealth on their own. This type of investor recognizes that money never sleeps, the economy is always changing, and crashes and booms can come and go.
For those who have specific long term plans and goals, want a secure retirement, want to know their money won’t run out before they die, and want assurance they are continually on track to achieve all these things, the percentage-based approach is the right choice.
Percentages can vary from less than 0.5% to 2% or perhaps higher. Most common in the industry is a fee of around 1%. You can expect lower fees when you have more assets under management with a investment companies. In our case our fees are reduced when an investor exceeds $10 million with our firm.
Is a financial advisor worth it?
It is if what you just read describes you accurately. Most people don’t know how to manage their wealth, especially as they get older and into retirement. Taxes become more complicated. Social Security arrives. IRAs have to be converted or withdrawn from, or both – in a very specific manner. Life insurance, annuities, stock options, inheritances, estate planning, medical issues – as we said earlier – wealth protection doesn’t get easier as you get older. It gets harder.
Make mistakes in these areas, and you can get fined, overtaxed, and underpaid.
Just as one example, we once worked with a retired client who owned stock options in an oil company. We recommended selling his stock options, because far too much of his wealth was concentrated there. But he was emotionally attached to the company he had worked at for so long.
Sadly, one day the company lost a ton of value and the stock price plummeted, never to rise again to its previous high levels. This client lost a huge amount of his wealth, and had no way or time to recover it.
This is just one of countless ways you can lose huge amounts of money if you don’t have an experienced, fiduciary, independent consultant working with you on an ongoing basis (and it helps to take their advice, as this story shows). Someone who knows you, and doesn’t treat you like a number.
So yes, 1% is more than worth it. It can save you from astronomical losses and help you pursue your financial serenity.
To learn more about this approach, click here to read our guide on the 5 essential shifts that help you achieve financial security.
Fee-Based Financial Advisors
This option is sort of a hybrid between fee-only and commissions-only. This type of financial planner charges some sort of fee like the options just discussed, but also charges commissions when they sell particular products or investments.
If they are a fiduciary, they must disclose every commission they might make, and each situation when they charge it. If they are not a fiduciary, you may be paying a lot of money to your advisor and not even realize it.
This is particularly common with annuities.
To learn more about the hidden costs associated with wealth management, click here to read our guide on finding a financial advisor for ultra-high net worth investors.
Commission-Only Financial Advisors
At the other end of the spectrum are financial planners who only earn based on commissions. These advisors have a clear interest in selling you investment products, and you will feel the pressure to take them up on it. To be clear, Pillar sells no products and takes no commissions.
Beyond these three basic fee structures, however, financial advisor fees can be set up with dozens of variations. Some charges will be explained up front when you meet your advisor. Others can be hidden.
For instance, a non-fiduciary advisor who charges a percentage-based fee on your assets under their management (AUM) may look for ways to increase that AUM. We have seen this with clients whose previous advisors convinced them take out loans and put the money on margin. The agent makes a commission, but they have also increased their AUM, so their percentage-based fee increases.
To find out more about this, click here to chat with us.
Use Search Engines to Screen for Criteria
The internet is certainly a place to be careful. You can’t just trust anyone you find on there. But, it also is your single best resource for looking for financial advisors. The good news is you can narrow your search by putting a little more thought into your search criteria.
Don’t just search for ‘financial advisors.’ That’s too broad. Instead, use terms that relate to your stage of life, or your occupation, or the type of specialist you may be looking for. Some examples:
- financial advisors for young couples
- financial advisors for dentists
- independent financial advisors
- independent fiduciary financial advisors
- independent fiduciary high net worth financial advisors
The word ‘independent’ helps you avoid the big banks and large firms. Think about what you’re looking for in a financial advisor, what is a good match for you, and try to incorporate that in your search.
Questions to Ask a Financial Advisor Before Hiring Them
When you do narrow it down enough to start talking to some advisors, go in with specific questions to ask. This is your single best tool for weeding out fraud and incompetence, as well as making sure you’ve found a good fit.
Here are 10 questions to ask your financial advisor or wealth manager, and the answers you are looking for.
Verify Credentials, Check for Complaints
One of the most common complaints about financial advisors is that they don’t explain their products or services very well. What do they actually do? How do they create financial plans for their clients? What makes them customized?
Make your potential advisor explain their processes. If you’re still not understanding it after they’re done, consider looking elsewhere.
Pillar’s 100% customized planning process, as with many advisors, takes some time to explain. However, if you take the time to hear a few advisors explain their methods, you will start to realize how different ours is. The word innovative gets overused these days.
But if you want a truly innovative process that is built to assure you of your long-term financial serenity, one that quantifies the achievement of all your most cherished and desired lifestyle outcomes, you need to hear from us. You have two ways to learn our financial planning process:
The first option is slower, but you can go at your own pace. The second option is faster and you can get your questions answered quickly and decide your next steps.
Other complaints against advisors are that they just care about their commissions, they don’t respond fast enough, and they don’t put the client’s needs first.
You can avoid the commissions problem by looking for fee-only advisors. You can test their ability to respond by reaching out to them. If they don’t respond fast enough before you’ve become a client, you can be pretty sure they won’t afterward either. As for putting your needs first, this is why you should look for an independent fiduciary and not a big bank or large firm.
It is also smart to verify the credentials of any advisor you’re considering working with, and check their complaint record.
You can do this from the government website for the SEC.
Just type in the name of your advisor or their company and you can see their licenses, approval status, and much more. And don’t just look at the main page. There are also some blue buttons you can click which have much more information about each advisor. You can type in Pillar Wealth Management, in California, to see our listing.
If you see hardly any information about an advisor on the SEC site (or none at all), that’s a red flag and you should look for someone else.
The SEC site is the most authoritative site for verifying an advisor’s credibility and trustworthiness.
However, you can also look them up on several other sites, including www.finra.org/brokercheck, www.nasaa.org, www.naic.org, and www.cfp.net.
Learn How to Spot Fraud Risk
Again, start with the SEC site. Any advisor who is running Ponzi schemes or using other disreputable methods likely isn’t even registered.
But in addition to that, to be sure you are protecting yourself, look for these other fraud red flags:
Advisor is also the custodian of your account
Your financial advisor should never also be the custodian of your account. What this means is, the advisor doesn’t have direct access to your money. They use a custodian, typically a large brokerage firm. Pillar uses Fidelity as a custodian. This puts a barrier between the advisor and your money. The advisor is advising you, not personally managing your money.
Advisor’s name is on your actual accounts
This is called commingling, and it should never happen. If your advisor’s name is on your account, then they can go in and access your money. Again, using the custodian approach, you are protected.
Excessive trades and churn
Too much trading is a sign your advisor earns commissions for each trade. Because generally, excessive activity doesn’t lead to better performance. It also generates higher taxes. So why would an advisor do this unless it benefitted them in some way (unless they’re just incompetent)?
– Advisor asks for power of attorney
– Advisor targets you because of your cultural or religious affiliation
This is a major source of fraud, because when an advisor aligns themselves with a particular group, the other people within that group will almost immediately trust them. They are less likely to check up on that advisor using the resources we just gave, because they see that person as “one of them.” Don’t fall for it. We recommend NOT working with a financial planner who markets themselves specifically to your cultural or religious group.
Promises unrealistic investment performance
Promising performance of any sort is risky, and the SEC frowns on it. Promising absurd performance, like 15% per year, is a huge red flag. But again – if this sort of promise comes from someone aligned with a cultural or religious group you belong to, you will be more susceptible to their promise.
Vague explanation about fees
Use our previous discussion as a guide. Your advisor should be able to explain their fees very clearly and quickly. It should not be complicated.
The Benefit of Hiring the Best Financial Advisor Near Me
So, you are now armed with quite a lot of information that should help you find the best financial advisor, whether they are near you or not.
You know how financial advisor fees work. You are armed with questions to ask any potential advisor. You know how to verify their credentials. You know some red flags to watch out for. And, you know the most common types of financial advisors and how to identify ones with strong reputations.
Put all this together, combined with the other resources we’ve given, and you should feel more confident about being able to find the best advisor for your needs.
If you are a high net worth or ultra-high net worth investor, hopefully you’ve seen enough to know that Pillar Wealth Management should be one of the first places you call.
Again – we have a $5 million minimum requirement, so please do not contact us if you do not have this level of high net worth. Use our guides and resources to find another advisor who is best for you.