Skip to main content

«  View All Posts

Personal Finance

Give Your Financial Adviser the “Shark Tank” Treatment

March 22nd, 2016 | 3 min. read

By Jacob Schroeder

Shark_Tank_Logo.jpgWant to know if your financial adviser is providing maximum value for your money? Try looking at your adviser like a start-up.

Evaluating an adviser as if you were investing in a new company helps you find the right adviser for your financial goals as well as avoid those who are only looking out for their own benefit.

Many investors may assume portfolio performance is the only metric in which to judge the ability of a financial adviser. But the management of your money is only a part of the whole financial picture.

You shouldn’t underestimate the value generated by planning and coaching an adviser can provide such as creating a detailed retirement plan. For example, a Franklin Templeton study of retirees found that 83% of retirees who worked with an adviser retired on their terms.

Below are various factors that can help you determine a financial adviser’s value.

Financial Adviser Value Factors

1. Provides comprehensive services

A good adviser can help maximize all aspects of your financial life. Many advisers simply offer to manage your investment portfolio. But what about help with tax efficiency, costs, withdrawals, risk management and simply making smart, prudent financial decisions? An adviser who helps you implement comprehensive wealth management strategies can boost your net portfolio returns by 3% over time, according to a study by Vanguard.

2. Keeps a clean track record

Honesty is the best policy. Unfortunately, not all advisers follow that maxim. In a study by the University of Chicago, 7% of advisers have been disciplined for misconduct, such as selling unsuitable investments to clients or making trades without their input. Before you hand over your hard-earned dollars to an adviser, do a search through government websites such as the Securities and Exchange Commission’s Central Registration Depository and the Financial Industry Regulatory Authority’s BrokerCheck. You can look up any past disciplinary action, registrations or licenses, and educational and career histories.

3. Maintains transparent costs

How your adviser is compensated can directly affect how you will be served. Ask how specifically they are compensated and how much you will be charged. If an adviser primarily earns a salary from selling financial products, there could be a conflict of interest. They may be more inclined to earn money on you rather than for you.

You don’t want to pay for what you’re not getting. Cost is a major determinant of your return; the more you pay, the less you get to keep. Consider that conflicted advice may cost retirement savers as much as $17 billion a year, according to research by the White House Council of Economic Advisers.

Of course, every adviser who is compensated for selling financial products isn’t dishonest. But it may indicate they do not follow a fiduciary standard, legally obligating them to put your interests above their own. If so, be sure you understand the benefits of any products they recommend.

4. Is accessible and responsive

Helping you put a financial plan into place is only half the story. It only works if you stay the course to follow it through. An adviser helps you do that by providing coaching and guidance along the way. Therefore, when hiring an adviser or firm, find out how the relationship will work. Will you have a single adviser? How frequently will you meet or talk to your adviser? What is the estimated response time for your requests or questions? How will you be notified of any changes to your portfolio?

5. Educates you

How well do you understand what your adviser is talking about? Better yet, how diligent is your adviser in making sure you understand? Knowledge is power when it comes to making smart financial decisions. If an adviser doesn’t dedicate time to financial education to help you make more informed decisions, then they’re unlikely to give you the best chance to achieve your financial goals.

6. Educates themselves

The alphabet soup after the name of an adviser doesn’t necessarily indicate what type of adviser you’ll get. However, certain industry-recognized credentials, such as CFP and CFA, do provide some insight. In order to use those designations, an adviser must earn a certain number of continuing education credits. That means they are likely to have the most up-to-date information on finance rules and fundamentals.

A financial adviser is a smart investment, but not just any adviser. Do your homework.


At Advance Capital, we’re confident in our dedication to always put people first. Therefore, if you’re shopping for a financial adviser, download this free checklist to help you find the right adviser.

Or, even better, contact us today for a free, no obligation financial plan.