Are You Getting Expert Financial Advice? Here’s How to Tell

Financial knowledge is crucial. When it comes to finances, most people accept that they lack information and therefore look to experts who can help make things clearer. The problem is that not all “experts” are truly reliable. In fact, a recent report from the Consumer Financial Protection Bureau revealed that many so-called financial advisors have false credentials; some credentials are actually available for purchase online.

Tricksters and Frauds

financial-advisor-fraudIt can be quite difficult to figure out whether or not the financial advisor before you is reliable. It’s a bit problematic, as even frauds come with “credentials”.

Here are a few warning signs to help you figure out if you are dealing with a trickster:

  • Lacks actual experience. Unscrupulous financial advisors can buy credentials off websites, but they can’t buy real experience. You have to ask for all credentials, including education and job experience. Get feedback from previous clients if you can.
  • Sales mode on. When you speak to your financial advisor, is he or she constantly pushing for a new investment product?  A real advisor will discuss your issues and concerns and help you pick out the right investment path for you. If your advisor spends all your meeting time discussing products they are selling, be warned.
  • Insufficient information. If your advisor isn’t telling you where your money is invested or can’t provide the right account details when pressed, chances are you’re dealing with a fraud. Your advisor should be able to show you your stocks’ performance against a proper benchmark, so you have a clear understanding of how much you’re gaining.
  • One-sided advice. A fraudulent financial advisor will try to steer you towards what they want to achieve. They will downplay your concerns rather than address them honestly.

Qualities to Look For

financial-advisor-legitThis being the case, you have to be very particular in choosing the right financial advisor.In order to make sure you’re getting the advice you deserve, you have to know what to look for.

These are some of the qualities you ought to look out for when selecting an advisor:

  • Expertise training. There are different types of advisors, and they all have their respective niches. If you’re a student, it’s best to find someone who has expertise in handling your case. Seniors and retirees have to hire advisors who are experts in handling their particular situation. It’s not a one-size-fits-all sort of situation.
  • Availability. You have to get an advisor who will make time for you. If you can’t get hold of your advisor, you might as well find a new one. There’s no point hiring an advisor who can’t give you the time of day.
  • Logical planning. A good advisor won’t just give you empty promises. He or she must be able to provide a clear plan for the client. This plan is based on clear metrics, stock forecasts, and investment products.
  • Risk aversion. Financial advisors have to warn their clients of possible losses. It’s not enough that they encourage investments. Part of their responsibility is to warn clients and to make sure they have emergency funds for sudden expenses.
  • Constantly updating. A good financial advisor won’t rest on his or her laurels. It’s not enough. He or she will keep on improving and tweaking the financial plan depending on the changes on the market.


Since even credentials can be questionable, it’s useful to have organizations that you can actually fall back on to make sure that you’re getting a real advisor. Try Broker Check to help you check the credentials of investment advisers and stockbrokers. Another option is to visit the Investment Adviser Public Disclosure for information on fees and other pertinent details.

Of course, it would be best if your advisor were part of a well-known organization that upholds stringent ethical standards. This is the best way to ensure that a third party will be able to police your advisor’s actions. Do you use a financial advisor? How did you find them? Do they size up to the standards above? Share with us in the comment box below!

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>