4 Main Points on how to choose a Financial Advisor

Financial Planner

Credit: Dennis Jarvis

Choosing a financial advisor can be a daunting proposition. Today, we’ll tackle some of the biggest questions and points that one should take into account during your search!

What kind of licensing does the advisor have?

A well rounded advisor has a series 7, series 66 and a life/annuity registration.

A series 7 allows the advisor to sell all security products, except for commodities and futures.

A series 66 allows the advisor to be an Investment Advisor Representative.

An annuity/life license allows the advisor to handle annuity and life insurance transactions.

Having the series 7 and 66 allows an advisor to conduct fee based or commission business.

Having only a series 7 registration allows the advisor to only conduct commission based business.

Ideally, your advisor will have all three of these qualifications. The reason I suggest this is that if a financial services person only has, say, an annuity/health registration, those will be the only products they can offer. Since one size doesn’t fit all, clients often are missing out on viable investment opportunities with a financial services person who isn’t fully qualified.

Are they independent?

There are basically two ways financial advisors work. One is through a wirehouse broker/dealer. These are the big firms whose names you are probably familiar with. These firms have production/sales numbers that their advisors must meet each month. They also frequently have proprietary products – meaning house brand products. They may not be the best investment product on the market, but the payout to the firm is usually more, because it’s their in house creation.  Being that production numbers must be met and proprietary products are sold – sometimes there are situations where there is a conflict of interest between the goals of the advisor and the needs of the client.

The second way that financial advisors work is by being independent. Being with an independent broker/dealer offers all of the same compliance oversight for the advisor and client as a wirehouse, but allows the advisor much more freedom to run their practice. There aren’t monthly production quotas, and most don’t have any proprietary products. For example, www.lpl.com is an independent broker/dealer.

I find independent advisors much more desirable, as they aren’t being pushed by the home office to hit a certain sales number. They also aren’t being nudged to use proprietary products. An independent advisor with series 7, series 66 and a life/annuity registrations is the solid combination for a client to have for transparency, ability to be placed in the appropriate investments, and unbiased client portfolio management.

In most cases, independent advisors are seasoned professionals. Most independent firms only allow experienced advisors to become affiliated with their broker/dealer.   The advisor, in most cases, has an opportunity to utilize many more investment products when they are independent, as opposed to when they are with a wirehouse firm. Choice is good, right?


What kind of background do they have?

A fantastic, but little known resource is the FINRA broker check. http://brokercheck.finra.org/Search/Search.aspx

FINRA is the ruling entity over advisors. You can find out :

  1. What licensing the advisor has
  2. How long they’ve been in practice
  3. How many firms they’ve worked for (ask questions if they have changed firms several times over their career)
  4. Have they had any reportable events – arrests, bankruptcies, client complaints.


Do they have any professional designations?

There are many professional designations available that advisors can have. Most seasoned advisors have one. Ask the person you are working with if they have one and what it means. It’s nice to know that your advisor has taken the time to go above and beyond to educate themselves in their field.


Sharon L. Herman AAMS, ADPA is the CEO of Silver Key Wealth Management, and affiliated with LPL Financial. www.silverkeywealth.com

Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Silver Key Wealth Management, a registered investment advisor and separate entity from LPL financial.

Ms. Herman may only discuss and/or conduct transact securities business with residents of FL, MI, GA, VA, NJ, TX. www.finra.org. www.sipc.org

About Edgar DeJesus

Edgar DeJesus, a Husband first and foremost who shares his life with his loving wife Emily and their pet Charleston(chocolate American Cocker Spaniel). Fellow colleagues recognize him as one of the top mortgage planners in the Tampa Bay market and a fellow professional you can count on, his clients love him for being their trusted advisor. What keeps this hardworking mortgage planner going is his pure passion to deliver an extraordinary customer service experience. The question behind his motivation is simple - What differentiates him from every other real estate financing professional? He answers the question by saying: On every mortgage I provide for a client I treat it as if I were buying or building a home for my family, consolidating my debt, lowering my interest rate, or improving my own home. I deliver no less than I would expect if someone were providing me with a mortgage and most important their want & need is my want & need. He also says it is not just about providing mortgages, it’s about building life long lasting relationships. Some of his favorite hobbies are spending time with his family and friends, playing golf, dining at steakhouses, & fellowship with others. Satisfaction for Edgar DeJesus comes from not only closing loans but rather opening doors. Receiving referrals from clients is a great compliment he can receive and the greatest compliment is to have clients repeat their loan experience with him. A great demonstration that he does not over promise and under deliver.
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