What’s one of the best ways to choose a Financial Advisor?
A personal referral is usually the best way, so try asking someone you trust and respect who they use to help them with their financial planning. Satisfied customers are usually glad to let others know they’ve found someone they can trust to help them meet their goals.

The Advisors Group works almost exclusively from referrals and personal introductions by their existing clients.

What credentials should you look for?
On the NASD website, they list no fewer than 69 different financial credentials that you may run into. The website is particularly helpful in disclosing who grants the credentials, how much work is required to get the credential, and how much continuing education is required once the credential is earned. Most individuals seek a CFP (Certified Financial Planner), CPA-PFS (Certified Public Accountant-Personal Financial Specialist), or ChFC (Chartered Financial Consultant).

Evaluating Advisor Credentials

	Prerequisites/ Experience Required	Education Requirements/ *Examination Type	Continuing Education/ Experience Requirements
CFP (Certified Financial Planner)	Candidate must meet one of the following requirements: three years of personal financial planning experience and a bachelor’s degree, or five years of personal financial planning experience	Candidate must complete a CFP-board registered program or hold one of the following: CPA, ChFC, Chartered Life Underwriter (CLU), CFA, Ph.D. in business or economics, Doctor of Business Administration, Attorney’s License *Final certification exam	30 hours every two years
PFS (Personal Financial Specialist)	Candidates must meet all of the following requirements: 1) Be a member of the AICPA; 2) Hold an unrevoked CPA certificate issued by a state authority; 3) Earn at least 100 points under the PFS continuing education point system; 4) Substantiate business experience in personal financial planning-related services	See left *Final certification exam	Must obtain a combined total of 60 PFS points in personal financial planning business experience and qualified “life-long learning” activities every three years
ChFC (Chartered Financial Consultant)	Three years of full-time personal finance or insurance experience	Five core and three elective American College courses *Final exam for each course	30 CE credits every two years

At The Advisors Group our professional qualifications include the Certified Financial Planner™ (CFP) practitioner designation, IRA Distribution Specialist and Graduate Estate Planning Consultant. These credentials are maintained by exceeding the continuing education requirements that are expected each year.

How should an advisor be paid?
The two most common ways of paying an advisor are by a commission or fee. “Fee-only” means the advisor earns no commissions, but rather charges an agreed upon flat fee or a percent of assets under management. “Fee-based” is a lot like “fee-only” with the exception that some part of an advisor’s compensation could be derived from commissions (usually from the sale of insurance or other financial product). A commission-based advisor usually derives most of their income from the sale of financial products.

There are constant arguments in the planning community about which service platform is better (fee versus commission). Basing one’s decision about which advisor or firm to work with based solely on how they are compensated would probably be making an over-simplified decision. Rather, what’s more important is that you understand how an advisor is paid and how they charge, whether it be fees and/or commissions and that they are fully disclosed. 

The Advisors Group would be considered a “fee-based” company because a majority of our firm’s revenue comes as a percentage of the assets being managed, or a flat fee. We are strong advocates of full and fair disclosure whether it be advisory fees or commissions.

How many years of experience and what type of experience should I look for when selecting a financial advisor?
Financial planning is a complex field and it takes time to learn it. Unfortunately for the investment public, it’s much more lucrative for advisors to just manage your money and not really spend time in areas such as: retirement cash flow analysis, estate planning, education funding or tax reduction. You want to make sure an advisor has a sufficiently long track record of giving financial advise and is established in the profession, look for five years or more of experience.  

The Advisors Group Planners average over 17 years of industry experience not to mention their related experiences in banking and small business. We have the gray hair to prove it!

Can you check on the compliance background of a financial advisor?
Just like you’d run a background check on a prospective employee, you can do the same on your advisor. Advisors are required to give you a copy of their form ADV Part II at the beginning of an engagement. The ADV Part 1, however, will tell you if the advisor has violated any rules or regulations.

You can view our ADV Part 1 by going to http://www.sec.gov/investor/brokers.htm. 
Part II is available on our website under the literature/forms tab on the main menu bar.

Doing your homework ahead of time will allow you to make an informed decision when choosing your advisor. We are confident that if you do this you’ll be well on your way to enjoying the benefits of working with a trusted advisor. We encourage you to ask questions in the interviewing process and once you get past the checklist of those desirable qualities such as competency, compensation, experience and background, ask yourself, “Would I enjoy working with this advisor?”