How to select a financial advisor

June 10, 2018

Every week, Simply Money’s Nathan Bachrach, Ed Finke and Amy Wagner are answering your financial questions in The Cincinnati Enquirer. If you, a friend, or someone in your family has a money issue or problem, please feel free to send those questions to yourmoney@enquirer.com


Kyle from Boone County: How should I go about selecting a financial advisor?  

Answer: One of the biggest questions to ask a prospective advisor is if he or she is a “fiduciary.” This means that your advisor will manage your investments for your benefit and not their own, and decisions will be made in your best interest. Simply put, you should insist to work with someone who adheres to the fiduciary standard. 

Also be sure to ask about his or her credentials and education. While the CERTIFIED FINANCIAL PLANNER™ designation is the gold standard for investment advisors, there are other credentials that great advisors also have, such as Chartered Financial Consultant®. Many years of experience and a proven track record are also important.  

We recommend using the website BrokerCheck.org to help you make an informed decision. This site will give you a brief history about the advisor’s employment and licensing information. 

After you feel comfortable with the advisor’s experience and credentials, understand how he or she gets paid. Generally speaking, you want to avoid advisors that work solely on commission – getting paid via a commission can taint advice because there’s a vested interest in steering you in a certain direction. Instead, look for someone with a fee structure (charging a percentage of your assets under management) that is backed by a fiduciary promise. This approach is consistent, and you know your interests are at the foundation of the advice they give. 

Lastly, evaluate how you feel about this advisor. Can he or she meet your needs? Do they understand your financial situation? If you are about to head into retirement, you want an advisor that works with a lot of pre-retirees. The more experience they have with your situation the better they will be able to understand what is important when developing your financial plan. 

The Simply Money Point is that the most truly effective financial advisors will, among other things, help you with short-term goals, such as saving for a child’s college tuition, and long-term goals, such as retirement preparation or achieving financial independence. Take your time with the selection process. You want to be certain your financial advisor is appropriately qualified and can help you achieve your goals now and into retirement.  


Beverly in Delhi Township: Any tips for ways I can get my house paid off faster? I’m 52 with about $75,000 left on my mortgage. 

Answer: Paying off your mortgage could be beneficial to your retirement plan. By eliminating this large expense, you’ll free up more of your income to fund your lifestyle. Here are a few ways you can pay off your mortgage a little faster. 

First, you could consider increasing your monthly payment. Look at your budget and determine areas where you may be able to shift more money to your principle. Restructuring your budget will not only help you find extra cash to put toward your mortgage, but it can help save you some money. If you go this route, be sure to specifically tell your lender that the extra money is for “principle only.” 

You could also try switching to bi-weekly payments. This basically means you would pay half of your mortgage every other week. Doing it this way means you’d be making 13 full-sized payments within a year instead of the normal 12… yet you haven’t had to make a huge financial sacrifice to make the extra full payment. 

Depending on how many years you have left on your mortgage, another option would be to refinance down to a shorter term. Depending on your interest rate, this may lower the amount you will pay in interest over the term of your loan. Keep in mind that shortening your loan term may increase your payment. Plus, don’t forget about closing costs. 

If you ever come into “extra” money, such as a bonus at work or a big tax refund, that could be put toward principle as well. 

Always talk to your lender before you start moving forward with a strategy like this – you need to make sure you won’t be charged a penalty for early repayment. Also, paying off your mortgage early might not make sense for your particular circumstance. You don’t want too much money going toward your house and not enough going into other investments and retirement accounts. 

The Simply Money Point is that everyone has a different financial situation. Determine your financial priorities and then assess how you would like to spend your money.


Responses are for informational purposes only and individuals should consider whether any general recommendation in these responses are suitable for their particular circumstances based on investment objectives, financial situation and needs. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing, including a tax advisor and/or attorney. Nathan Bachrach and Ed Finke and their team offer financial planning services through Simply Money Advisors, a SEC Registered Investment Advisor. Call (513) 469-7500 or email simplymoney@simplymoneyadvisors.com.


Financial Planning Retirement