EVALUATING FINANCIAL ADVICE
Advocate for Your Best Outcomes
"65% of investors distrust the financial services industry, specifically brokers & financial advisors, to work in their best interest."
Source: American Association of Individual Investors
Every investor wants to work with an advisor they like, trust, and respect. However, assessing the quality of financial advice can be challenging—even for experienced investors. The complexity of financial markets, products, and the inherent knowledge gap between advisors and clients makes this process difficult.
Often, the decision to choose an advisor is driven by emotion rather than logic. Many investors select advisors based on personal rapport or referrals—decisions that may be influenced by subjective factors rather than objective evaluations. Below is a guide to help you make a clear, informed decision when evaluating potential advisors—whether it’s Altruist Wealth Management or another practitioner.
THE QUESTIONS THAT NEED TO BE ASKED
Are They a Fiduciary?
Even well-intentioned advisors can face conflicts of interest, especially if they are affiliated with firms that sell commission-based products. To ensure an advisor’s guidance aligns with your goals, look for a Registered Investment Advisor (RIA) who operates under the fiduciary standard.
Know the Difference:
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Broker-dealer advisors typically hold a Series 7 license, allowing them to sell securities for commissions. They follow the suitability standard, which does not require them to act in your best interest.
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Fiduciary RIAs typically hold a Series 65 or 66 license, indicating they are compensated for advice—not sales.
To confirm an advisor’s credentials and affiliations, use FINRA Broker Check for detailed information.
What is their scope of services?
A comprehensive financial plan goes beyond investment management. True holistic wealth management should include:
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Estate Planning
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Tax Planning
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Cash Flow & Budgeting
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Risk Management & Insurance Planning
A CFP® designation signals an advisor has demonstrated expertise across multiple areas of financial planning. Advisors who integrate all aspects of your financial life help ensure your strategy aligns with your long-term goals.
What is their investment philosophy?
Some advisors promote proprietary investment strategies, claiming to beat the market. While compelling, these approaches often fail to align with actual client outcomes. Predictive, active investing has a well-documented history of underperformance relative to broad market returns.
A strong, evidence-based investment philosophy emphasizes:
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Diversification
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Cost & Tax Efficiency
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Disciplined Risk Management
If an advisor claims to consistently outperform the market, ask for an audited track record. Transparency and alignment with proven investment principles matter.
What is their fee structure?
Fee transparency is critical when choosing an advisor. Work with someone who charges clearly stated fees for advice, rather than earning commissions from third-party products.
Be cautious of “fee-based” advisors, as they may earn both fees and commissions, creating potential conflicts of interest.
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Understand the impact of assets under management (AUM) fees on your long-term wealth.
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Look for advisors who can articulate their fees in dollar terms. If they can’t or won’t, it may be a red flag.
How do they make you feel?
While logic should drive the evaluation process, a successful advisor-client relationship also requires trust and communication.
Ask yourself:
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Do you feel heard and respected?
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Does the advisor explain concepts in a way you understand?
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Are they presenting multiple scenarios to empower your decisions?
Choosing the right financial advisor means finding someone who meets both your logical and emotional criteria—ensuring a successful long-term partnership.