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The Best Financial Planners Share These 5 Traits

You want a financial advisor who puts your needs first and has an affordable, transparent fee structure. We'll detail what to look for and offer suggestions for services.
March 26, 2020
Advisors, Financial Planning, Investing, Retirement Planning
The Best Financial Planners Have These 5 Things in Common
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When it comes to choosing a financial planner, it pays to find help that will put you first.

If you’re sensitive to cost and mainly want help with investment management, a robo-advisor might suit you. These online services offer low fees, and many include access to human advisors when you have questions. (Intrigued? Check out our list of the best robo-advisors.)

On the other hand, a traditional, in-person human advisor or online planning service like Facet Wealth might suit you better if you want more wide-ranging money advice or have a complex situation.

Either way, here are five traits that the best financial planners have in common.

» Looking for a financial planner? Jump to a list of our recommendations.

1. They follow the fiduciary standard and put you first

You want an advisor who is a true fiduciary, which means someone who looks out for your best interest and puts it above his or her own. Fiduciaries make the right decisions for you, even when it costs them. Ask potential advisors if they follow the fiduciary standard.

Doing what’s in the client’s best interest is broader than matching him or her with the right financial product. “A great planner needs to get clients to explore all reasonable opportunities,” Sheryl Garrett, founder of the financial advisory Garrett Planning Network, says. Part of a planner’s job is finding out what the client wants, even if the client isn’t quite sure.

» Get started: How to choose the right financial advisor for you

2. They’re transparent about how they get paid

It’s important to understand how your financial advisor gets paid: by you, by big financial firms for putting you into certain products, or something in between.

The best financial planners are clear upfront about how they’re compensated. And the ideal scenario is they’re compensated by you, not big financial firms. Some people who call themselves financial advisors may be paid in a way that creates a conflict of interest, and you don’t want that conflict.

Look for a fee-only fiduciary, advises Micah Hauptman, financial services counsel at the Consumer Federation of America, a consumer advocacy group. Going with a fee-only advisor may cost more money upfront, but it should save you money in the long run because your advisor will act in your interest.

» Crunch the numbers: How much does a financial advisor cost?

3. They focus on motivating you

The best financial advisors not only develop a financial plan for you, they also help you stick to it. They energize and motivate you to meet your goals. The best financial plan in the world won’t matter unless you have the determination to see it through, and that means a long-term commitment measured in years.

“The most important role of the financial advisor is to help a client get the most out of their financial lives — be the most effective catalyst for them, light the fire under the client,” Garrett says.

The most important role of the financial advisor is to help a client get the most out of their financial lives — be the most effective catalyst for them.

Sheryl Garrett, certified financial planner

Motivation also means keeping clients calm when the markets zig and zag, as they inevitably do. The best advisors focus on behavioral finance, Hauptman says, reinforcing clients’ good behavior, managing their expectations and making sure they’re not chasing performance.

Importantly, find an advisor whose motivational style works for you.

4. They’re clear about your relationship

When you hire a financial advisor, you want to be absolutely clear on the relationship. Whom will you work with? How often will you meet? How will you pay the advisor?

Hauptman explains: “The best advisors provide pre-engagement disclosures. They provide a plain-English summary about the relationship, the services and products, and how the client will pay for those products.” The best advisors will also show you any conflicts of interest they might have.

The best advisors provide a plain-English summary about the relationship, the services and products, and how you will pay for them.

Micah Hauptman, financial services counsel, Consumer Federation of America

The best financial planners are interested in your welfare and will clearly detail what you need to know before you decide. Garrett says: “Investigate the advisor beforehand online. Invest some time interviewing them. Take your time. Don’t let anybody rush you.”

» Do a background check: How to check a financial advisor’s record

5. They shape a plan that meets your needs

Everyone walks into an advisor’s office with a different situation, goals and expectations. The best advisors listen to you and shape a financial plan around your requirements.

» Prep for the meeting: 10 questions to ask a financial advisor

“The best financial advisors have the ability to connect and get to know what clients really need as quickly and efficiently as possible,” Garrett says. The advisor must actively listen and empathize with the client, structure a plan around client needs and then show how the plan fits together.

“The best advisors aren’t the most brilliant — they’re the one most appropriate for you,” Garrett says.

If you’re interested in financial planning services, here’s a comparison of some of our recommended robo-advisors and online planners:


Why we like Betterment:

Betterment is the largest independent robo-advisor, with low management fees. Clients can upgrade to Betterment Premium for access to financial advisors.

» Read our full review
Management fee: 0.25% to 0.40%

Account minimum: $0 ($100,000 for Betterment Premium)

Promotion: Up to 1 year free management with qualifying deposit.
SoFi Automated Investing

Why we like SoFi:

SoFi charges no management fee and offers unlimited access to a team of CFPs.

» Read our full review
Management fee: 0%

Account minimum: $0

Promotion: Free career coaching, plus loan discounts with qualifying deposits.

Why we like Wealthfront:

Wealthfront is strictly digital, with powerful financial planning tools and a low management fee.

» Read our full review
Management fee: 0.25%

Account minimum: $500

Promotion: $5,000 managed free for NerdWallet readers.

Compare more robo-advisors

Online financial planning services

Facet Wealth

Why we like Facet Wealth:

Facet Wealth offers dedicated CFPs and charges a flat fee based on how much financial advice you require. Investment management is included.

» Read our full review
Management fee: $1,200 to $6,000 per year. Account minimum: $0
Personal Capital

Why we like Personal Capital:

Personal Capital offers dedicated CFPs and charges a percentage of assets under management.

» Read our full review
Management fee: 0.89%

Account minimum: $100,000

Promotion: 2 free months of financial advisory services for NerdWallet readers.

Compare more financial advisors

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