7 Mistakes People Make When Choosing a Financial Advisor

7 Mistakes People Make When Choosing a Financial Advisor

Helping people make smart financial decisions

Choosing a financial advisor is a major life decision that can determine your financial trajectory for years to come.   A 2020 Northwestern Mutual study found that 71% of U.S adults admit their financial planning needs improvement. However, only 29% of Americans work with a financial advisor. 1

The value of working with a financial advisor varies by person and advisors are legally prohibited from promising returns, but research suggests people who work with a financial advisor feel more at ease about their finances and could up end up with about 15% more money to spend in retirement.2

Consider this example: A recent Vanguard study found that, on average, a hypothetical $500K investment would grow to over $3.4 million under the care of an advisor over 25 years, whereas the expected value from self-management would be $1.69 million, or 50% less. In other words, an advisor-managed portfolio would average 8% annualized growth over a 25-year period, compared to 5% from a self-managed portfolio.3

SmartAsset's no-cost tool simplifies the time-consuming process of finding a financial advisor.

A short questionnaire helps match you with up to three fiduciary financial advisor that serve your area, legally bound to work in your best interest. The whole process takes just a few minutes, and in many cases you can be connected instantly with an advisor for a free retirement consultation.

Advisors are rigorously screened through SmartAsset's proprietary due diligence process. 

Being aware of these seven common blunders when choosing an advisor can help you find peace of mind, and potentially avoid years of stress.

1. Hiring an Advisor Who Is Not a Fiduciary

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