How to Find a Fiduciary Financial Advisor to Work With

Choosing a financial advisor is an important financial milestone, but first, you must know whether they adhere to a fiduciary standard. A fiduciary advisor is required to act in your best interest, offer unbiased advice and clearly explain any fees or potential conflicts. This helps provide you with trustworthy support when investing, planning for retirement or working toward other financial goals.

If you have questions about investing, retirement planning, taxes or another financial situation, speak with a fiduciary financial advisor.

How to Find a Fiduciary Financial Advisor

To find a qualified fiduciary financial advisor, you must first understand who can serve as a fiduciary, as well as their legal and ethical standards. 

Use a Professional Organization

Professional organizations can be a helpful way to find advisors who follow high ethical standards.

The National Association of Personal Financial Advisors (NAPFA) is one example. It requires its members to be legally bound fiduciaries.

These organizations maintain directories allowing you to search for advisors by location, credentials and specialty. Many of these fiduciary advisors pass background checks and meet continuing education requirements.

Reviewing profiles on these sites can help you compare options and confirm fiduciary status so you can choose someone who fits your financial needs.

Get Matched

Another option is to use an online platform that matches clients with financial advisors based on your unique needs.

SmartAsset’s matching tool is one example that can help you find advisors in your area who operate under a fiduciary standard.

These platforms ask you a series of questions about your financial goals, risk tolerance and specific requirements. The matching process curates a list that simplifies the comparison of services, fees and credentials.

This personalized approach increases the likelihood you’ll find a professional well-suited to your individual financial situation.

Ask Friends or Family for a Referral

Word-of-mouth recommendations can be a valuable resource when searching for a fiduciary advisor.

Ask for referrals from trusted friends, family members or colleagues who have had positive experiences with their financial advisors. Personal referrals often provide insights that online reviews and directories cannot. It’s a great way for you to learn about the advisor’s style, responsiveness and reliability in challenging market conditions.

Once you receive referrals, schedule consultations so you can gauge whether their approach aligns with your needs. Come prepared to discuss your financial goals.

What to Consider

Once you have a list of candidates, it’s time to evaluate them. Consider these key factors when making your choice.

Verify Certifications

You should make sure that your advisor holds the necessary license and is registered to operate as a fiduciary.

Look for designations such as a Certified Financial Planner™ (CFP®) or Chartered Financial Analyst (CFA). These require members to adhere to a fiduciary standard.

You can also use resources like the CFP Board’s directory to confirm credentials are current and advisors are free of disciplinary actions.

Specify Services

Consider the range of services the advisor offers to ensure they can meet all your needs.

Financial planning can encompass several areas.

• Retirement planning
• Investment management
• Estate planning
• Trusts
• Tax optimization
• Real estate

Assess your own financial needs to ensure the advisor’s expertise aligns with your priorities.

Have Them Explain Their Fees

Cost transparency is key when selecting a fiduciary advisor.

It’s important to know whether your advisor has a fee-only, fee-based or commission-based fee structure. Each creates different incentives and potential conflicts of interest.

• Fee-only. Fee-only advisors are paid directly by clients. This removes any incentives to recommend products solely for commissions, reducing potential conflicts of interest. They typically charge a flat fee, a percentage of assets under management (AUM) or hourly fees.
• Fee-based. Fee-based advisors earn a combination of advisory fees and commissions on the products they sell. While they still provide financial advice, their mixed compensation model can lead to conflicts of interest.
• Commission-based. Commission-based advisors earn income solely from the sale of financial products. They may favor products that generate higher commissions, but they may not always be in your best interest.

To avoid confusion, request a clear breakdown of all advisor costs, and ask for any disclosures regarding commissions. Ensure you fully understand the terms and conditions before proceeding.

Ask Questions

Prepare a list of key questions to ask during consultations. Be sure to inquire about the advisor’s:

• Included services
• Fiduciary duty
• Investment philosophy
• Portfolio management strategy
• Rebalancing strategy
• Approach to conflicts of interest
• Communication frequency
• SEC compliance status

Client references can also help you determine if their approach aligns with your expectations.

Ensure that you feel comfortable with their responses, and ask to review evidence of their fiduciary commitment.

How to Check an Advisor’s Background and Disciplinary History

Just because an advisor presents well in a consultation does not mean you should skip a review of their track record.

Two free government databases exist specifically to help investors do that research, and most people never use them.

• BrokerCheck. Available from the Financial Industry Regulatory Authority (FINRA), BrokerCheck covers brokers and brokerage firms. ¹ You can search by name or firm and see registration history, exams passed, employers over time and any disclosures, which is the term the database uses for complaints, regulatory actions, criminal matters like breach of duty and certain financial events like bankruptcies.
• Investment Adviser Public Disclosure database. The SEC provides the Investment Adviser Public Disclosure database that shows registered investment advisers and their firms. ² It also includes their Form ADV, detailing their compensation, services and any conflicts of interest they are required to disclose.

When reviewing a record, pay attention to the nature of any disclosures. A single customer complaint from years ago that was resolved without finding wrongdoing reads differently than a pattern of complaints or a regulatory sanction. Terminations listed as related to misconduct are worth asking about directly.

Advisors with clean records generally have no problem with you doing this research. Those who are uncomfortable may be worth a second look.

State securities regulators maintain their own databases, as well. This is useful for advisors who operate only at the state level, as they may not appear prominently in the federal databases.

The North American Securities Administrators Association website can point you to your state’s specific regulator.

What the First Meeting Should Look Like

Most people walk out of an initial advisor consultation without a clear sense of whether it went well. This is partly because they were focused on answering questions rather than evaluating the person asking them.

A first meeting should go both ways and address these areas.

Your Financial Status

A good advisor will spend a meaningful portion of the conversation asking about your situation before offering any opinions. They should first understand your income, existing assets, debts, timeline and goals.

If someone starts recommending products or strategies before they have a clear picture of where you stand, it may be cause for concern.

Fees

Pay attention to how they explain their fee structure.

You should receive a straightforward explanation of what and how they charge, as well as what you receive in return, without follow-up questions to extract. If the fee conversation feels evasive or complicated, it will likely stay that way.

Ask specifically whether they earn any compensation beyond what you pay them directly, including referral fees or product commissions.

Management Style

A few targeted questions here can help you determine whether the advisor’s management style aligns with your preferences.

• How do they handle a market downturn?
• What will they do if they think a client’s financial goals were unrealistic?
• Who covers your account if they are unavailable?

How the advisor responds to these prospecting questions will tell you a lot about them and their temperament. Someone who becomes defensive or vague when challenged is showing you how the relationship will work when it matters most.

After meeting with two or three candidates, compare them on substance rather than style. Comfort and likeability matter, but the more useful comparison is who asked better questions, who explained their approach the most clearly and whose fee structure makes the most sense for your situation.

Bottom Line

Fiduciary advisors offer the assurance that their decisions are made with your best interest in mind. Their expertise can help you navigate the complexities of investing and retirement planning. Leveraging professional organizations, online matching tools like SmartAsset and personal referrals will all help you find advisors who meet rigorous standards. Before making a final decision, verify their certifications, ensure you understand their fee structure and ask plenty of questions.

Financial Planning Tips

• A financial advisor can help you mitigate risk for your portfolio. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
• If you want to build your savings up consistently, consider setting up automatic transfers from your checking to your savings accounts. This approach could help you make saving a routine part of your financial life.

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