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This knowledge article is part of a series of knowledge articles aimed to help you define your roadmap to savings and investing.  To review the previous knowledge article in this series, click here.  To review the table of contents for the articles, click here

How To Pick A Financial Professional

Are you the kind of person who can go "solo" on the journey of saving and investing? Do you have a firm command of your investment choices and how to go about making them?

Maybe you're one of the people who already has all the answers. If not, you will probably end up getting some help from a financial professional, such as an investment adviser, a financial planner, or a broker.

Investment professionals offer a variety of services at a variety of prices. It pays to comparison shop.

You can get investment advice from most financial institutions that sell investments, including brokerages, banks, mutual funds, and insurance companies. You can also hire an investment adviser, an accountant, a financial planner, or other professional to help you make investment decisions.

Investment Advisers and Financial Planners 

Some financial planners and investment advisers offer a complete financial plan, assessing every aspect of your financial life and developing a detailed strategy for meeting your financial goals. They may charge you a fee for a plan, a percentage of your assets that they manage, or receive commissions from the companies whose products you buy, or a combination of these. You should know exactly what services you are getting, how much they will cost, and how your investment professional gets paid. Smaller investment advisers are generally regulated by those states with the authority to do so. For information on how to contact your state's securities agency, call NASAA at (888) 846-2722 or visit its website.


Brokers make recommendations about specific investments like stocks, bonds, or mutual funds. While taking into account your overall financial goals, most brokers will not give you a detailed financial plan. Brokers are generally paid commissions when you buy or sell securities through them.

Brokerages vary widely in the quantity and quality of the services they provide for customers. Some have large research staffs, others specialize in particular types of companies, for example, companies that are new and have never been in business before. 

  • A discount brokerage charges lower fees and commissions for its services than what you'd pay at a full-service brokerage. But generally you have to research and choose investments by yourself.
  • A full-service brokerage costs more, but the higher fees and commissions pay for a broker's investment advice based on that firm's research.

You can check out your prospective or current broker online through the National Association of Securities Dealers. Another good place to turn for information is your state securities agency, which can be accessed through the website for the North American Securities Administrators Association.

Questions to Ask Before Selecting an Investment Professional

The best way to settle on an investment professional is to know what type of services you need and then figure out who is best suited to get the job done for you. Once you know that ask your friends and colleagues whom they recommend. Try to get several recommendations, then arrange a face-to-face meeting. Make sure you get along with the financial professional. Make sure that he or she understands your goals and risk tolerance.

Here are some questions to ask before hiring an investment professional:

  • Are you licensed with the states or SEC?
  • Do you have disciplinary problems on file with the NASD or states?

  • How are you compensated?

  • What is your relevant experience as a financial professional?

  • What kind of special education or training have you received?

  • How would you describe your investment philosophy?

  • Do you understand my financial goals and risk tolerance?

  • What other clients do you have whom I could speak to?

  • What kind of periodic reports on my money should I expect from you?

At this point, you are within two stops of completing your saving and investing journey! Now it's time to move on to the next stop: "How to Avoid Problems."