Financial Advisor “Star Search:” Is there a way to truly assess financial professionals?

George Reilly |

Even those who don’t watch so-called reality television programs know that a common theme is to allow contestants to demonstrate their talents in an effort to win the grand prize and hopefully move on to a rewarding career after the show. I have not yet seen a talent show for financial advisors and wondered how (or if) people searching for a qualified financial professional could make an assessment of someone before committing to work with them. Short of seeing them “show their stuff” is there some objective and/or subjective assessment you can make?

While perhaps not as easy as simply watching a TV show, there are some resources available to consumers to help them, at a minimum, understand the different types of financial professionals in the marketplace, learn about the differences in how fees are charged and which services are offered, identify the education and qualifications of these professionals, and be able to compare and contrast different professionals along the lines of a “head to head matchup” on a reality show.

A critical starting point is to recognize that any assessment tool you use must be free of any inherent bias towards a particular type of planner or at least identify its bias or preference in an open and transparent manner.

For example, the National Association of Personal Financial Advisors (NAPFA), of which I am a member, serves fee-only financial advisors and is a strong advocate for a fiduciary standard that requires its members to always work in the best interests of their clients and not offer product sales or potentially conflicting services. NAPFA is very open about its membership criteria and view of fee-only planning. They do offer consumers a number of useful tools such as a downloadable e-book called “The Pursuit of a Financial Advisor Field Guide” available at NAPFA also offers some questionnaires that a consumer can use to screen financial advisors. The “Comprehensive Financial Advisor Checklist” and other tools are available at

Certified Financial Planner™ practitioners are governed by the Certified Financial Planner Board of Standards, Inc. The Board promotes the CFP® mark as the “gold standard” for financial planners or, as they describe it: “Although many professionals may call themselves “financial planners,” CFP® professionals have completed extensive training and experience requirements and are held to rigorous ethical standards. They understand all the complexities of the changing financial climate and will make recommendations in your best interest.”

On its website,, the Board has a number of free publications for consumers including a handout called the “Consumer Guide to Financial Planning” that advises consumers on “what you should know about financial planning, how to get started with your financial plan, and how to find a Certified Financial Planner™ practitioner qualified to help you with your financial planning needs.”  While the CFP® Board does not take a position on the compensation methods of CFP® professionals, their bias is certainly in favor of financial professionals completing the educational, experience, and examination requirements needed to earn the Certified Financial Planner™ mark. Since I am a member of that particular group I personally don’t have any problem with this standard being advocated as being a useful demarcation point for consumers researching financial professionals.

In a similar manner, the Financial Planning Association (FPA), the largest membership organization for CFP® professionals in the U.S., advocates for the Certified Financial Planner™ mark being considered as the gold standard for professional financial advisors. And like the CFP® Board, the FPA is, in their words, “compensation neutral and represents those from diverse backgrounds and business models.” The FPA has a page called “Why Hire a Certified Financial Planner” that offers a nice, concise guide to the value that can be added by a qualified professional financial advisor.

Apart from these organizations that have a vested interest in promoting Certified Financial Planner™ practitioners, regardless of their compensation methods and service offerings, there are a number of independent consumer-oriented organizations that you could turn to for unbiased advice on how to assess various financial professionals. For instance, Consumer Union, the parent company of the popular magazine (and website) Consumer Reports, periodically has articles about financial services and professionals. One example is an August, 2015 article aptly titled “Is your financial planner getting rich at your expense? Not understanding how your money adviser gets paid could cost you handsomely.”  

In the article Consumer Reports stated that the “best line of defense against unscrupulous planners is to educate yourself. That can be confusing at first, because there are more than 150 designations for financial service professionals. But many of the titles are dubious; they can be earned after just a few hours of study and an open-book test. Adding to the confusion is that many suspect designations sound similar to legitimate ones.” They went on to say “We recommend using financial planners who have the CFP® designation. That indicates that she has passed a comprehensive certification examination provided by the board, has at least three years of financial-planning experience, and is committed to continuing education in financial concerns.” However, the article noted that it was also important “to make sure you understand how the financial planner you select is compensated. Not all CFPs are fee-only; some are paid by commission or a combination of fees and commission. The CFP Board requires only that planners make it clear to clients how they’re compensated.”

Finally, the Financial Industry Regulatory Authority (FINRA) has some useful resources on its website including a guide entitled “5 Steps for Selecting an Investment Pro.”  FINRA describes itself as “an independent, not-for-profit organization authorized by Congress to protect America’s investors by making sure the securities industry operates fairly and honestly.” As such, they generally don’t have direct oversight of most financial professionals truly serving as comprehensive financial planners as they focus on securities firms and brokers (think of the now out of favor title “stock broker,” now more commonly called “financial advisor” or “wealth manager”….) However they do offer some excellent guidance on how to understand the different “flavors” of financial professionals, whether FINRA members or not.

So that was a lot of information to absorb. And yes, it’s not as easy as watching a talent show and voting off the less desirable or talented contestants. But we are talking about your hard-earned money and who you should team up with to help you best manage your own resources and get you on the path to financial independence. There are a lot of people who call themselves financial professionals, advisors, or planners but not all will be a good fit for you. Hopefully using the resources above or other tools you can sort through your options and find the right person or team to help you.

We at Safe Harbor Financial Advisors know that we are not the best fit for everyone but we certainly are a good fit for many. We are members of NAPFA as mentioned above as well as the Garrett Planning Network, the largest group of fee-only, hourly financial planners.  Learn more about the Garrett Network at and about Safe Harbor at

Good luck!