How to choose a financial advisor

When you actually need one

There is no income threshold that switches an advisor on. The honest trigger is complexity: a life change — sale of a business, an inheritance, a retirement on the horizon — or a stack of decisions you keep deferring because no one has time to research them all. If your situation is one index fund and a 401(k) match, an advisor may cost you more than the advice is worth.

There are more registered advisors wherever you live than you will ever interview, so the checking, not the finding, is the actual work.

The three checks

1. The SEC/IAPD record. Look up the name or the CRD number and you get current registration, employment history, and any disclosures.

2. FINRA BrokerCheck. The same CRD number also surfaces brokerage registrations and regulatory events — the parts of a career that the advisory record alone can miss.

3. The firm's Form ADV brochure. How the firm is paid, what it charges, which conflicts it discloses. If the person is real and the brochure is clear, you have a candidate. If either step fails, you are done — no meeting needed.

Five questions for the first meeting

“Are you a fiduciary for my account, at all times?” — and if the answer has a “but” in it, you have learned the most important thing about the relationship.

“What do you cost me, all-in, per year?” — advisory fee plus the cost of what they put you in. Ask for it in writing.

“What are you paid besides my fee?” — commissions, revenue sharing, bonuses. The brochure discloses it; hearing them say it is a different test.

“What would you do first, and why?” — a concrete first move you can evaluate against the plan you already have.

“What happens to my account if our relationship ends?” — portability, fees on the way out, and who holds the assets. Exits are where the worst surprises live.

Advisor or robo-app

A robo-advisor will rebalance, harvest losses, and stay disciplined for less money than a human charges — and it will never notice that your parent just moved into your house. The honest framing: automate the portfolio if the portfolio is the whole job; pay a human when the job is decisions, taxes, and the parts of finance that are actually life. Many households land on both, and the checks in this guide apply to the human half all the same.

Frequently asked questions