When searching for a financial advisor, there are a number of steps to take in finding an advisor who will be great for your situation. First, make a list of the criteria you require in an advisor. The criteria can include: professional investment and financial planning experience, investment performance, compensation structure (Fee only is best. Watch out for Fee-based advisors. They earn commissions on products sold, but are trying to make themselves sound like Fee-only.), credentials, frequency of contact and willingness to develop a long-term fulfilling relationship for both parties. Furthermore, does your potential advisor have investment research capabilities and services such as The Bloomberg Professional Investment Research Service and Morningstar Principia Pro Plus and/or Morningstar Workstation to analyze individual equities and mutual funds respectively?

Evaluate your future advisor by asking him the following questions: "How frequently will you contact me?" The answer should be usually "monthly". The next question is, "How long does it take to respond to client inquiries?" The answer should be "usually within twenty-four (24) hours." Will the advisor provide investment tax planning services as well as calculate the cost basis information on securities in addition to preparing the investment gains and losses information for income tax reporting purposes? How often will your advisor report performance (a percentage gain or loss on the amount being managed)? Quarterly reporting is the norm. Brokerage statements don’t report performance. Also, The Securities and Exchange Commission requires advisors to provide clients with their ADV part II upon signing a contract.

Other tips include, avoid advisors who are employed by Wall Street brokerage houses. These brokerages continually are being fined by government agencies and sued by ex-clients for securities manipulation and fraud. Most brokers are not crooks, but many sell very expensive managed money accounts, which significantly reduces an investor’s return. The SEC, NASD and the Pennsylvania Securities Commission should be contacted to determine if the advisor has had any securities violations. Avoid one-product-solution advisors, such as individuals selling annuities only or life insurance for every problem. Banks have their conflicts as well. Frequently, their bias is in the form of attempting to sell mutual funds which they own or those with high commissions. Even in their trust departments, banks frequently recommend only large U.S. stocks and bonds, not exactly a formula for success in the next decade due to the high valuations of stocks and the fact that rising interest rates will harm bond values. It is always better to create a relationship with an advisor that is "advice-driven".

Furthermore, does the potential advisor provide you with comprehensive financial planning services, such as income tax planning and projections, education funding planning, retirement planning, survivor planning, employee stock option analysis, estate plan document reviews, and if applicable, philanthropic guidance? Does your advisor perform analysis of your auto, homeowners and umbrella liability insurance? The best advisors provide these services.