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Question: I have been using an adviser/investment firm for the last few years, but I am not satisfied with the relationship. My finances include 401(k)s from a few different jobs and a few focused brokerage accounts. What is the best way to find an alternative adviser?
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Answer: The first thing you want to do is figure out what went wrong with the current adviser relationship. Was it communication, reporting, investment performance, lack of attention to planning items, personality incompatibility, or something else? "Once you're sure what you're looking for to be different or better, it's easier to begin the search process," says certified financial planner Elyse Foster at Harbor Wealth Management. Certified financial planner Blaine Thiederman at Progress Wealth Management adds: "The best way to find a new adviser is to start by asking yourself what you really want and need in the adviser you're looking for."
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When you interview advisers armed with an understanding of what you want, Zach Hubbard at Greenspring Advisors says you can communicate exactly what your expectations are for the relationship and screen out any advisers who may be too similar to your current one. You will want to clearly define the scope of the engagement you're looking for. "What do you want the adviser to do? Manage your portfolio? Help you plan for retirement? Do you want a narrower, investment-focused relationship or a broader planning engagement?," says certified financial planner Jim Hemphill at TGS Financial Advisors.
Additionally, Thiederman suggests considering whether you need assistance with budgeting help, tax preparation, career planning, rental property management or behavioral changes surrounding money. From there, you can start to look for an adviser that offers - and has experience in - the specific services you find most valuable. Be sure to also think about things like whether meeting remotely via Zoom is OK, or if you need them closeby so you can meet in person.
Looking for a new adviser? Use this tool to get matched with an adviser who may meet your needs.
You most likely want to work with someone who is a fiduciary, meaning they're obligated to put the needs of their clients ahead of their own. You may want to consider a fee-only CFP, a certified financial planner who doesn't receive compensation other than the fee they collect from their client. CFPs undergo rigorous training, pass exams, and have thousands of hours of work experience to hold the CFP designation.
Overall, the adviser search is really a matching process. "You want someone who enjoys working with folks like you, who is experienced and credentialed and who charges a fair price for the work you need done. If you have certain look-and-feel preferences, for example a woman adviser, or a younger person, or a member of your faith community, that's entirely reasonable, as long as you don't compromise credentials and objectivity," says Hemphill.
Most commonly, people select an adviser via referral from a friend, family member or colleague. "If you prefer not to leverage your existing relationships, doing research through trusted organizations can be a good place to start," says certified financial planner Sam Schwartz at Anchorpointe Wealth Management.
Restricting your adviser search to fee-only advisers with the certified financial planner designation can be a good start. "To find such an adviser, I suggest starting with the National Association of Personal Financial Advisors (NAPFA) website. NAPFA members are all fee-only advisers and all are fiduciaries, so some of the major sources of conflicts of interest like sales commissions or weaker standards, are eliminated," says Hemphill. For his part, Thiederman adds that zoefin.com and thefeeonlynetwork.com are great resources to find an adviser who's both non-commissioned and best suited to your needs. You can also use this tool to get matched with an adviser who may meet your needs.
"When evaluating potential advisers, be sure to ask about their experience and credentials, as well as their investment philosophy and the services they offer. The best way to find an alternative adviser is to do your due diligence and take the time to find someone who is a good fit for your financial goals and preferences," says certified financial planner Scott Monk at Charis Legacy Partners. Here are15 questions you should ask an adviser before you hire them.
Bottom line: "Remember, you're entrusting someone with your hard-earned money, so it's important to choose someone you feel comfortable working with and who has a track record of success," says Monk. (Looking for a new adviser? Use this tool to get matched with an adviser who may meet your needs.)
Have an issue with your financial adviser or looking for a new one? Email picks@marketwatch.com.
Questions edited for brevity and clarity.