Start with the Basics: Are They Legally Registered?
Before you listen to anything an advisor says, confirm they’re actually allowed to give advice. That means checking whether they’re registered with the SEC (Securities and Exchange Commission) or FINRA (Financial Industry Regulatory Authority). It’s not flashy, but this is the foundation.
Use public tools like FINRA’s BrokerCheck or the SEC’s Investment Adviser Public Disclosure (IAPD). These are free, fast, and full of data. In seconds, you can see if someone has a clean record or if they’ve been hit with disciplinary actions, fines, or customer complaints that haven’t been resolved.
Biggest red flags? Multiple complaints, a history of shady sales behavior, or surprise disciplinary actions. If you spot anything that looks off, move on. There are too many qualified pros out there to take a risk on one with baggage.
Dig Into Their Professional Certifications
Letters after someone’s name aren’t just alphabet soup they hint at what an advisor is actually trained to do. But in 2026, with more people slapping credentials on their profile, it’s time to separate the signal from the noise.
Start with the heavy hitters. A CFP® (Certified Financial Planner) isn’t just about investments it means the advisor should know about taxes, retirement, insurance, and cash flow. Holistic planning, not just stock tips. A CFA® (Chartered Financial Analyst) leans heavily into investment research and portfolio strategy ideal if you’re hiring someone to actively manage or advise on complex investments.
Then there are credentials like ChFC® (Chartered Financial Consultant), CPA/PFS (Certified Public Accountant/Personal Financial Specialist), and others. These can matter a lot depending on the advisor’s focus tax planning, estate issues, or insurance, for example. But you’ve got to ask how often they actually use that knowledge in their practice. Some folks earn a credential, then never apply it.
Don’t stop at the title. Check whether the certification is still active and in good standing. Many have regular continuing education requirements. An expired CFP® or a CPA who hasn’t practiced in five years won’t bring the same value. Dig deeper. Ask.
Bottom line: titles matter, but context matters more.
Evaluate Their Actual Performance, Not Just Promises
Choosing the right financial advisor means digging beyond flashy claims or surface level success stories. Promises don’t build wealth proven performance does.
Ask for Verifiable Performance Data
Don’t rely on feel good anecdotes or vague statements of success. Instead:
Request reports that show actual portfolio results over multiple years
Look for third party verification wherever possible
Ask how results are tracked and reported
Understand the Role of Benchmarks
To truly evaluate performance, you need context. That’s where benchmarks come in.
Key things to ask:
What benchmark(s) does the advisor use to evaluate their investment strategies?
How have their portfolios performed relative to those benchmarks?
Are the comparisons apples to apples (e.g., same asset class, risk level, time period)?
Prioritize Consistency Over Hype
Short term wins may sound impressive but they don’t always reflect thoughtful long term planning.
Look for:
Steady, repeatable results across different market cycles
Risk adjusted returns not just raw numbers
A coherent strategy behind the performance
Watch Out for Cherry Picked Scenarios
It’s a red flag if an advisor only offers “highlight reel” examples.
Be cautious if you notice:
No mention of down periods or past mistakes
Only showcasing best performing clients
Avoiding direct questions with vague reassurances
Reliable advisors are transparent about both wins and challenges and they explain their process, not just their outcomes.
Understand Their Fiduciary Duty (or Lack of It)
Just because someone calls themselves a financial advisor doesn’t mean they’re required to put your best interests first. That’s where the term “fiduciary” comes in. In 2026, this distinction still separates the real pros from the salespeople.
A fiduciary is legally obligated to act in your best interest at all times. They can’t recommend products because they pay better commissions, or steer you toward funds that aren’t a fit just to meet quotas. They work for you, not the payout.
Then there’s the suitability standard. It sounds okay just has to be “good enough” but that’s where you can get burned. An investment might technically be suitable for your risk tolerance and timeline, but still not be the best option available. And that’s where hidden fees, complex products, and vague advice creep in.
Ask them straight: “Are you a fiduciary at all times?” Don’t accept a squishy answer. Get it in writing. If they dodge, that’s probably all you need to know.
Don’t Skip the Transparency Test
Start with one question: how do you get paid? If an advisor dances around it, that’s a red flag. The three basic models are fee only, commission based, or a hybrid of both. Fee only means they get paid a flat rate, hourly fee, or a percentage of the assets they manage no kickbacks from products. It’s the cleanest model for avoiding conflicts of interest.
Commission based advisors, on the other hand, earn money when you buy specific investments or insurance products through them. Doesn’t automatically mean they’re shady but it does mean their advice might lean toward what pays them more. A mixed model usually combines both, so you’ll need to watch where the incentives are stacking up.
Bottom line: you deserve a full breakdown of all fees, product affiliations, and any potential conflicts. Solid advisors will put it in plain English with nothing buried in fine print. If they hesitate to spell it out, move on.
Assess Fit Just Like You Would a Job Candidate
An advisor might have the right credentials and clean records, but if they don’t “get” you, it won’t work. Start with the basics: do they actually understand what you’re trying to achieve? Your short term goals, long term vision, how much risk you’re willing to take, and how your life is evolving these aren’t just checkboxes. A good advisor will listen, remember, and adjust as things shift.
Pay just as much attention to how they communicate. Do they keep things simple or drown you in acronyms? Do they explain why they’re recommending something, or just expect you to nod along? You shouldn’t leave meetings feeling more confused than when you walked in.
Last test: notice whether they bring ideas to you first. Good advisors are proactive. They’ll flag tax opportunities or portfolio adjustments without waiting for you to ask. If you’re always the one initiating, that’s a red flag. You’re hiring someone to think ahead, not follow instructions.
When You’re Still Unsure
If you’re second guessing your gut or feeling overwhelmed, that’s normal. This isn’t picking a new pair of shoes it’s about your money and your future. So, slow it down. Don’t lock in with the first advisor you meet. Interview at least two or three. Treat it like hiring for an important role because it is.
Bring a checklist to each conversation. You want to ask the same questions across the board: Are they fiduciaries? How do they get paid? What’s their experience with clients like you? How often will they check in? Their answers will start to draw contrast. The right fit will become clearer.
Still wrestling with timing or unsure if now’s even the right moment to hire someone? Check out this solid guide: When to Hire a Financial Advisor: Key Signs You Need One.