How to Choose the Right Financial Advisor for Your Unique Situation

According to Statista, just 35% of Americans had a financial advisor in 2022. One potential factor holding people back is a lack of confidence in how to choose a financial advisor.

Should you work with a wealth manager, an investment advisor, or a holistic planner?

Do the best financial advisors hold certain credentials?

What type of advisor is best for your unique needs?

These questions can feel overwhelming, and it’s easy to end up uncertain about where to start.

For many, the difficulty lies in understanding what sets one advisor apart from another. You might already have a financial advisor, but if you’re unsure whether they’re the right fit, you’re not alone. Here at Wealthquest, we believe the right financial advisor should make things simpler, not more complicated.

Many people find themselves with a disconnected experience—one advisor handling investments, another taking care of tax planning, and yet another offering estate planning. Without coordination, this approach can often result in mixed messages, missed opportunities, and added stress. An excellent financial advisor may struggle to help you achieve your goals when siloed from your tax planning, investment strategy, and estate planning.

In this article, we’ll look at different types of financial advisors, seven questions to consider when looking for financial planning services, as well as professional certifications to keep in mind. Finally, we'll show how an integrated approach can help bring clarity and confidence to your financial journey.

‍

What to Consider When Choosing a Financial Advisor

Choosing a financial advisor can have a lasting impact on your financial future. From retirement planning to investment advice, different advisors offer services for your current and future needs. But with so many different types of advisors and services out there, it's wise to understand how to make the right choice for your unique needs.

Different Kinds of Financial Advisors and Their Roles

The financial advisory world can seem like a maze, with many professionals offering overlapping services. From wealth advisors and investment advisors to insurance agents and holistic financial planners, each role has distinct strengths—and limitations.

• Investment Advisors: Investment advisors are primarily focused on managing your investment portfolio. Their goal is often to optimize returns according to your risk tolerance and financial goals, but their services may be limited to just portfolio management rather than a broader financial strategy.
• Insurance Advisors: Insurance advisors typically focus on selling insurance products, such as life insurance, annuities, or long-term care policies. While these may play a role in a financial plan, it’s crucial to know that insurance advisors often work on commission, which may influence the products they recommend. They may present themselves as financial advisors, but their primary aim may be insurance sales rather than comprehensive financial guidance.
• Holistic Financial Planners: Holistic planners, like Wealthquest, take a broad view of your financial life. They integrate investments with tax strategies, estate planning, retirement preparation, and more, aligning all areas of your finances with your long-term goals. This all-encompassing approach can often provide the clarity, consistency, and peace of mind that fragmented services lack.

Understanding these differences is key to finding the advisor that aligns with your needs. If your financial life is getting more complex with significant investments or planning for retirement, working with a holistic financial planner who offers a coordinated approach can be an effective choice.

Fiduciary vs. Suitability Standard

One of the most important distinctions to make when choosing an advisor is whether they operate under the fiduciary or suitability standards. A fiduciary advisor is legally bound to put your best interests first. This fiduciary duty means they should be committed to providing advice that serves your financial situation and goals rather than being influenced by commissions or sales incentives.

In contrast, an advisor who follows the suitability standard only needs to recommend products that are “suitable” for you, even if those products might not be the best possible option. When your advisor is a fiduciary, you can be confident that their guidance should be unbiased and fully aligned with your goals, helping to ensure that you receive advice that’s genuinely in your best interest.

What About Robo-Advisors?

In recent years, robo-advisors have emerged as a lower-cost, technology-driven alternative to traditional financial advisors. These platforms use algorithms to automatically manage your investments based on your financial goals and risk tolerance. While their low fees and ease of use are appealing, they generally provide limited personalization and lack the human touch that many value.

If your financial situation is straightforward and you prefer a hands-off approach, a robo-advisor could help with basic portfolio management. However, if your financial landscape involves more complexity, a human advisor can offer tailored advice and comprehensive support that robo-advisors simply cannot match.

‍

Evaluating the Right Fit: 7 Questions to Ask a Potential Advisor

Once you understand the different kinds of financial advisors, the next step is evaluating which one could be the right fit for you. An advisor's credentials matter, but discovering whether they understand your unique needs and have a clear process to support you can bring you even more confidence they're a good advisor for you. Here are some questions you might ask when meeting with a potential advisor.

1. How Will They Understand Your Unique Needs?

We believe financial planning is never one-size-fits-all. An advisor focused on you will take the time to get to know you, your family, and your financial goals. They'll dig deep into your vision of the future and ask questions like: Are you planning for retirement? Are you saving for your children's education? Have you looked for increased tax efficiencies?

2. How Do They Get Paid?

One of the most important questions to ask when choosing a financial advisor is how they’re compensated and what services are included in that fee. Some advisors focus exclusively on investments, which means they may only handle your portfolio, potentially leaving you to manage other critical areas like taxes, estate planning, and overall financial planning on your own. Others earn commissions on the financial products they recommend and sell you, which can create potential conflicts of interest.

As a fee-only advisor, Wealthquest charges a fee that is based on the assets under their management, providing an incentive for growing your investments over time. No commissions to worry about helps align recommendations from a fee-only advisor with your best interests.

However, not all fee-only advisors provide the same value. Some fee-only advisors only focus on managing your investments, offering limited guidance in other areas of your financial life. While this may be appropriate for some clients, it often leaves significant gaps in support for complex financial needs.

Our “one team for one simple fee” approach means you get full-service support, freeing you from the hassle of coordinating separate advisors or paying for disconnected services. We manage your investments, prepare your tax returns, craft personalized tax strategies, coordinate your estate plan, and seek to ensure every financial decision aligns with your broader goals—all included in a single, transparent fee.

When evaluating an advisor, it’s extremely helpful to ask: does their fee cover comprehensive financial guidance, or just one piece of the puzzle?

3. How Does Their Process Bring Clarity and Confidence?

We believe a good financial advisor should be able to explain their process in a way that gives you clarity and builds your confidence. The best advisors have a clearly defined, step-by-step approach that aligns their recommendations with your goals. While you may not understand the intricacies of how an investment strategy works, a good advisor should be able to break their process down in a way that you're able to understand the broader strategy so you have confidence your wealth is in good hands.

4. What is Your Approach to Risk Management?

Financial risk management is crucial for protecting your assets and achieving long-term goals. You might ask potential advisors how they assess your risk tolerance and how they adjust your portfolio over time to match your current financial needs and future financial goals. Their ability to manage risk effectively can have a significant impact on your financial security.

5. How (and How Often) Do You Communicate with Your Clients?

We believe consistent, clear communication is key to a strong advisor-client relationship. Consider asking how often they update clients on their financial plans, portfolio performance, or market changes. Does the advisor proactively reach out, or do you need to initiate contact? Do you review your taxes annually? How about your estate plan? A good advisor for you will have a communication schedule that aligns with your preferences so you feel informed and involved in your financial decisions.

6. What Happens If I Experience Major Life Changes?

Life is unpredictable, and your financial plan may need adjustments when circumstances change from events like a job loss, an inheritance, or a new addition to your family. How flexible is their financial planning process? How will they work with you through significant life events? A good advisor for you will adapt your plan quickly and effectively as your needs evolve.

7. What Kind of Clients Do You Specialize In?

Some advisors have particular expertise with certain types of clients like high-net-worth individuals, young professionals, or retirees. You might ask about their experience with clients whose financial situations are similar to yours. Reviews and testimonials from people in similar situations can also be helpful. While not all advisors are specialized, knowing they work with clients similar to you can give you confidence they'll understand your specific needs and have strategies tailored to your stage in life or financial goals.

‍

Understanding Financial Certifications

When evaluating a financial advisor, it’s important to consider their qualifications and professional designations, as these reflect their expertise and dedication to high standards in financial advising. Insurance licenses and designations, such as CLU® (Chartered Life Underwriter), may indicate a focus on insurance solutions and products from which they likely receive commissions. Wealthquest’s team includes advisors with a range of specialized certifications, ensuring they can provide comprehensive and informed advice tailored to clients’ unique needs.

• CFA® (Chartered Financial Analyst)¹: Advisors with the CFA® designation have a deep knowledge of investment management, financial analysis, and portfolio strategy. Earning this credential involves rigorous training in advanced financial concepts, making it a highly respected qualification for advisors who manage complex portfolios and are focused on long-term investment performance.
• CFP® (Certified Financial Planner)²: Advisors who hold the CFP® designation have completed extensive training across a broad range of financial topics, including retirement planning, tax strategies, and estate planning. A CFP® designation also requires advisors to act as fiduciaries, which means they’re committed to providing advice that is in their clients’ best interests.
• CPA (Certified Public Accountant)³: A CPA designation is earned by financial professionals who have met strict state licensing requirements, passed a rigorous exam, and have expertise in tax planning, compliance, and accounting. CPAs are especially valuable for clients needing tax-efficient strategies and insight into complex tax issues related to financial planning.
• CDFA® (Certified Divorce Financial Analyst)⁴: Advisors with a CDFA® designation have specialized training in navigating the financial aspects of divorce, including asset division, retirement planning, and tax consequences. A CDFA® can be a critical resource for clients who need informed financial guidance during the divorce process.
• CSLP® (Certified Student Loan Professional)⁵: Advisors with the CSLP® designation are skilled in creating strategies to manage and repay student loan debt. This expertise can be particularly beneficial for clients and families facing substantial student debt, as CSLP® advisors are equipped to incorporate loan repayment plans into a broader financial strategy.
• FPQP® (Financial Paraplanner Qualified Professional)⁶: The FPQP® designation signifies training in foundational financial planning concepts, including insurance, estate planning, and retirement. FPQP® professionals support advisors in developing and implementing financial plans, ensuring that all elements of a client’s plan are effectively coordinated.
• CFS® (Certified Fund Specialist)⁷: Advisors with the CFS® designation have advanced training in mutual funds and other investment products. This certification indicates expertise in constructing diversified portfolios and selecting funds that align with clients' financial goals, risk tolerance, and investment strategies.

Working with advisors who hold these designations assists in ensuring that you’re partnering with professionals who not only have specialized knowledge but are committed to ethical standards in the industry.

‍

Choosing Wealthquest for Clarity, Confidence, and Connection

When you choose a financial advisor, we believe the advisor's ability to build a relationship is as important as managing money, since that relationship can help them understand your unique situation and help you make confident decisions about your future.

At Wealthquest, our "All Under One Roof" approach aims to align every decision with your overall goals, seeking to provide efficiency and simplicity that disconnected advisors may not be able to offer.

Invest in Your Life. We’ll Do the Rest.

If you’re ready to leave behind the frustrations of disconnected advice and take a step toward a simpler, more confident financial future, Wealthquest is here for you. Based in Cincinnati, we’re proud to serve clients across the country, offering a warm, personal approach combined with expertise.

Reach out today for a consultation to learn how a single coordinated plan can bring clarity, confidence, and connection to your financial journey.

‍

‍

Notes:

¹ CFA® designates an international professional certificate that is offered by the CFA Institute. Candidates that pursue the certification have in-depth knowledge of securities types and investment vehicles. In order to qualify for a CFA®, candidates must meet standards for examination, education, experience, and ethics. First, candidates must possess a bachelor’s degree from an accredited school, or its equivalent. Second, candidates must have completed 48 months of qualified professional work experience, generally related to evaluating or applying financial, economic, and/or statistical data as part of the investment decision-making process involving securities or similar investment. Third, candidates must pass a series of three six-hour exams that covers ethics, quantitative methods, economics, corporate finance, financial reporting and analysis, security analysis, and portfolio management. Finally, candidates must meet and continue to adhere to a strict Code of Ethics and Standards governing their professional conduct, as reviewed by the CFA Institute.

‍

² The CFP® designation identifies individuals who have completed the mandatory examination, education, experience, and ethics requirements mandated by the CFP Board. Candidates must have at least three years of qualifying work experience that relates to financial planning. Candidates are required to hold a bachelor’s degree from an accredited university or CFP Board equivalent. CFP® candidates must pass an examination that covers over 100 financial planning topics, which broadly include: general principles of financial planning, insurance planning and risk management, employee benefits planning, investment planning, income tax planning, retirement planning, and estate planning. Finally, candidates have ongoing ethics requirements and oversight by the CFP Board.

‍

³ The CPA designation is given to qualified accountants. Candidates must pass the Uniform CPA Exam as well as meet education and work requirements—including holding a bachelor’s degree in business administration, finance, or accounting, and completing 150 hours of education. Candidates must also have two or more years of public accounting experience. The CPA license is provided by the Board of Accountancy for each state.

‍

⁴ CDFA™ professionals must develop their theoretical and practical understanding and knowledge of the financial aspects of divorce by completing a comprehensive course of study approved by the Institute for Divorce Financial Analysts. CDFA™ professionals must have two years minimum experience in a financial or legal capacity prior to earning the right to use the CDFA™ certification mark.

‍

⁵ The (CSLP®) designation helps advisors to accurately advise clients about student loan repayment within the scope of their financial goals. Candidates must have two years of industry experience in financial services or a bachelor's degree in business or finance from an accredited college or university and also hold a license and/or registration in a regulated financial services industry. Candidates must also pass a final examination and complete ongoing annual education requirements. The designation is completed through the Certified Student Loan Advisors Board of Standards.

‍

⁶ The FPQP® designation is awarded by the College for Financial Planning to individuals who complete a comprehensive course of study that covers key financial planning concepts, including the fundamentals of financial planning, insurance, investments, tax, retirement, and estate planning. To earn the designation, candidates must pass an examination and complete continuing education requirements annually to maintain the designation.

‍

⁷ Individuals who hold the CFS® designation have completed a course of study encompassing mutual funds, ETFs, REITs, closed-end funds, and similar investments. Topics include fund analysis and selection, asset allocation, and portfolio construction. The program is designed for approximately 15 weeks of self-study and an exam administered online.

‍