How to Know if a Particular Advisor is Someone You Can Trust

FINANCIAL ADVICE | GUIDANCE | INSIGHTS | OBSERVATIONS 

As consumers continue to feel the pressure of high inflation, variable interest rates, market uncertainty and spiraling health care costs (just to name a few), many are asking themselves whether it is worth bringing a professional financial advisor onto their team.

Of course, as advisors ourselves, our answer is a big “YES!” – but we’d never just leave it there. Big decisions should be made from an informed point of view, and we’re happy to shoulder the burden of proof and share the reasons why we firmly believe in the value we bring to our clients’ lives.

So, we’re going to set out in this week’s blog by asking – and then answering! – the four questions we believe could make all the difference when it comes to your financial prosperity, your confidence in your and your family’s future, and the security of knowing your financial plan is in the best possible hands.

  1. Is is better to have a financial advisor or not?

  2. What impact will having an advisor make on my future?

  3. How can I tell if a particular advisor is trustworthy?

  4. When is the best time to hire a financial advisor?

1. Is it Better to Have a Financial Advisor or Not?

People who work with a financial planning professional are better off – and those who work with a Certified Financial Planner™ reported the best results. But don’t take our word for it! Instead, just look at this study released on World Financial Planning Day 2023.

This FPSB Value of Financial Planning Research, undertaken for Financial Planning Standards Board Ltd. (FPSB) by independent research firm MYMAVINS, surveyed 15,332 advised and unadvised consumers age 25 and over across 15 territories, who either earned over $60,000 per year or held over $35,000 in investable assets.

The study found that around 9 out of 10 (87%) clients of Certified Financial Planners™ feel financially secure, and a similar proportion (86%) feel tangibly better off.

The FPSB study also examined the financial and non-financial impact of financial planning across quality of life, financial confidence, financial satisfaction and experienced value.

What concerns prevent people from seeking financial planning advice?

While unadvised consumers recognized improved financial well-being (37%) and greater wealth growth (36%) as key benefits to seeking financial planning, 3 out of 10 consumers perceived it as too expensive (30%) and believed it hard to find someone trustworthy (29%).

However, close to 9 out of 10 (88%) clients of CFP® professionals say the value of financial planning outweighs the cost, with 98% of those advised by a CFP® professional reporting they trust their financial planner to act in their best interests.

The study shows people who work with Certified Financial Planners™ have a better quality of life, enjoy more financial confidence and resilience, enjoy improved mental health, a better family and social life, and are more satisfied with their financial situation.

88% believe the value exceeds the cost, and 98% say they trust their financial planner to act in their best interests.

2. What Impact Will Having an Advisor Make On My Future?

Financial advisors can offer substantial value for your money, especially when it comes to making informed and strategic financial decisions. Navigating the complexities of investments, retirement planning, tax optimization, and overall wealth management requires expertise and up-to-date knowledge.

Financial advisors take it upon themselves to prevent you from making emotional decisions about your money. They will also coach you on developing the right financial habits, and improve your knowledge regarding your financial choices, making it clear how to go about balancing your short-term needs with your long-term goals.

Financial advisors will help you to maximize your earnings, optimize your investments, and ensure that you can face the future with greater confidence, optimism, and control.

3. How Can I Tell if a Particular Advisor is Trustworthy?

A financial advisor’s most valuable asset is not expertise, experience, or even the ability to generate returns for clients. It’s trust, the foundation of any successful advisor-client relationship. Trust is what sets an advisor apart from the competition and keeps clients coming back.

Naturally, trust emerges out of a long-term relationship, but there are a number of key indicators that ensure you can know you have the right person from Day 1. You’ll want to look at the individual’s journey to become an advisor, the licenses they hold, their areas of specialty and certifications to prove it, and lastly, their role as fiduciary advisors.

Let’s unpack why those things matter.

Becoming a financial advisor requires education, licensing, and experience. The specific path depends on the type of financial advising (investment management, financial planning, insurance, etc.), but here are the general steps advisors take to become financial advisors:

Obtain the Right Education

A bachelor’s degree in finance, economics, accounting, business, or a related field is highly recommended (but not always required). Some advisors pursue advanced degrees (e.g., an MBA) for higher-level career opportunities.

Get Licensed (If Required)

To provide investment advice or sell financial products, advisors often need to obtain specific licenses and registrations, such as:

    • Series 7 (General Securities Representative Exam) – Required to sell most types of securities (stocks, bonds, mutual funds).
    • Series 65 (Uniform Investment Adviser Law Exam) – Required to provide investment advice for a fee.
    • Series 66 (Uniform Combined State Law Exam) – Combines Series 63 and 65, allowing both investment advising and securities sales.
    • Insurance Licenses – Required to sell life, health, or annuity products. These vary by state.

Licenses and registrations are typically obtained through FINRA (the Financial Industry Regulatory Authority) or state regulatory agencies.

Gain Experience

Many financial advisors start as interns or junior associates at a financial firm, brokerage, or bank. Some work as paraplanners, assisting senior advisors with financial plans before moving into client-facing roles. Depending on the firm, an advisor may need 2–4 years of experience before working independently.

Earn Certifications

Advisors seeking to specialize in one or more financial disciplines must earn professional certifications to do so. These certifications require additional exams, experience, and ethical commitments.

You’ll know that a financial advisor has a professional certification by checking the letters after their name. The different abbreviations indicate professional designations or certifications they have earned to show their expertise in specific areas of finance, such as investments, retirement planning, or tax strategy.

Here are some common certifications and what they mean:

Financial Planning

    • CFP® (Certified Financial Planner™): Covers all aspects of financial planning, including retirement, estate, taxes, and investments. Candidates must complete coursework through a CFP Board-approved program and hold at least a bachelor’s degree. Requires at least 6,000 hours (about 3 years) of relevant professional experience or 4,000 hours of apprenticeship. Must pass a comprehensive 6-hour exam covering financial planning, retirement, investments, insurance, tax, and estate planning.

Investment & Wealth Management

    • CFA® (Chartered Financial Analyst): Focuses on investment management, financial analysis, and portfolio strategy. Candidates must hold a bachelor’s degree or equivalent work experience, at least 4 years of relevant investment-related experience, and pass a three-level exam series focused on investment management, financial analysis, ethics, and portfolio management.

Retirement & Tax Planning

    • CRPC® (Chartered Retirement Planning Counselor): Specializes in retirement planning strategies.
    • RICP® (Retirement Income Certified Professional): Focuses on strategies for generating income in retirement.

Insurance & Risk Management

    • CLU® (Chartered Life Underwriter): Specializes in life insurance and estate planning.

Although it isn’t a certification, you will also want to be on the lookout for the word “fiduciary”. An advisor who calls themselves a fiduciary seeks to minimize conflicts of interest, be transparent, and live up to the trust placed in them.

Just because a professional manages the money of their clients doesn’t mean that they automatically follow a fiduciary duty. Some professionals work for brokerage firms that aren’t registered as investment advisors, and as a result, are not bound by fiduciary duty.

More specifically, fiduciary financial advisors are legally required to:

  • Put their client’s best interests before their own, seeking the best prices and terms.
  • Perform due diligence to ensure that each investment aligns with their clients' goals, risk tolerance, and financial situation.
  • Act in good faith and provide all relevant facts to clients.
  • Avoid conflicts of interest and disclose any potential conflicts of interest to clients.
  • Follow the best course of action for their clients, regardless of how it affects them personally.
  • Avoid using a client’s assets to benefit themselves, such as purchasing securities for their own account before buying them for a client.
  • Take a holistic approach to portfolio management and financial planning.
  • Do their best to ensure the advice they provide is accurate and thorough.
  • Work with their clients to create tailored investment portfolios to help them achieve their financial goals
  • Regularly review their clients' portfolios and financial situations to adapt their advice as circumstances change.
All Financial Advisors at WestStar Prosperity Partners are fiduciaries.

A fiduciary financial advisor is a financial professional who is legally required to act in their clients’ best interests. They must adhere to a fiduciary standard that requires the highest level of trust and good faith.

How do I know who is a fiduciary financial advisor?

Visit FINRA BrokerCheck or call FINRA at (800) 289-9999. Or, visit the SEC’s Investment Adviser Public Disclosure (IAPD) website. You can also contact your state securities regulator.

The vetting process shouldn’t stop there, though.

What to Ask an Advisor to Ensure They Suit Your Needs

Once you identify potential advisors, here are six common questions you should ask to ensure that they suit your needs and have minimal conflicts of interest:

    • How are you compensated? Ask whether they operate on a fee-only basis or earn commissions, as earning commissions can impact potential conflicts of interest.
    • What certifications and licenses do you hold? Look for credentials like Certified Financial Planner™ (CFP®) or Chartered Financial Analyst (CFA®).
    • What services do you offer? Determine whether they provide comprehensive financial planning, tax strategies, retirement planning, or investment management.
    • Who is your typical client? Find out if they have experience working with clients in similar financial situations as you.
    • How will we communicate? Clarify how often you’ll receive updates and whether meetings are in person, virtual, or over the phone.
    • Do you provide a written fiduciary commitment? Request documentation confirming they will act in your best interest at all times.

When you’re working with a financial professional, it’s key to find out if he or she follows the fiduciary standard. Fiduciaries must always act in their client’s best interest – and if they don’t, you have legal options to pursue.

Ultimately, when it comes to choosing an advisor to manage your money, you should find someone you can trust. When you do, it can make all the difference for your long-term portfolio and your confidence in the future.

4. When Is the Best Time to Hire a Financial Advisor?

There’s no universal milestone that signals when you should hire a financial advisor — whether it is age, career stage or income level. However, if your financial situation has grown more complex than simply managing paychecks and expenses, it may be time to consider hiring professional help.

You’re sure to need a financial advisor at any point in the future when you experience significant life changes like buying a house, getting married, having children, starting a new career, inheriting money, or nearing retirement. These events often require adjustments to your financial plan and can benefit from professional guidance.

Remember, even if you’re currently financially stable, an advisor can help optimize your strategy and ensure you’re on track for your long-term goals.

Final Thoughts

At WestStar our goal is to ensure that your financial plan is designed to meet your needs, so you can face the future with confidence and clarity. If you have questions about your specific circumstances, please get in touch. We place the highest value on building trust and confidence.

We welcome the opportunity to chat with you and wish you every success in the future.

Sam Gullette & Erik Alexander

Sam Gullette, CFP®, CLU®
Certified Financial Planner™

‘My mission in life is to help people take control of their money and avoid financial stresses. My clients are successful professionals and executives, many of whom are compensated heavily with company stock. Together we maximize their wealth-building opportunities, minimize taxes, and make sure their family is protected if life throws them a curveball.’

Erik Alexander
Financial Consultant

‘I work with professionals and executives who are compensated through various forms of company stock.  They have more money than time and struggle to balance the key aspects of their lives. Their decisions affect others, and they feel a huge responsibility towards making them wisely. I enjoy helping them solve their complex problems, and being counted on for their and their families’ financial wellbeing.’

The views stated in this letter are not necessarily the opinion of Cetera Advisor Networks LLC and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein or as a recommendation of any kind. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed.