How to choose a financial advisor
A step-by-step framework for evaluating registered investment advisers — fiduciary status, fees, services, and red flags to check.
Choosing a financial advisor comes down to a few verifiable facts: whether they are a fiduciary, how they are paid, what they specialize in, and whether they have a clean regulatory record. You can check most of this yourself before your first meeting.
1. Confirm they are a fiduciary
A fiduciary is legally required to act in your best interest. SEC-registered investment advisers (RIAs) are held to this standard. You can verify any firm's registration on the SEC's Investment Adviser Public Disclosure (IAPD) site using its CRD number.
2. Understand how they are paid
Fee-only advisers are paid solely by their clients, usually as a percentage of assets managed. Fee-based advisers may also earn commissions on products they sell, which can create conflicts of interest. Ask for the fee schedule in writing — it is in the firm's Form ADV Part 2A.
3. Match their specialty to your needs
Some firms focus on retirement income, others on equity compensation, business owners, or high-net-worth estate planning. The firm's ADV lists the client types and services it focuses on.
4. Check the disclosure record
Disclosures range from minor administrative items to regulatory actions. One disclosure is not automatically disqualifying, but you should read the details and ask about anything material.
Put this into practice
Every firm profile on AdvisorGrade shows real, sourced fiduciary status, fees, and disclosure history from SEC filings — so you can check everything above in a couple of clicks.