Protect Yourself. Protect Your Money.
Hiring a financial advisor can be one of the smartest decisions you make in retirement—or one of the riskiest.
A good advisor can help you grow and protect your nest egg, plan for healthcare costs, reduce taxes, and leave a legacy. But a bad one? They can steer you into high-fee products, give poor advice, or worse—scam you out of your savings.
Sadly, not all financial advisors are created equal. Some are well-trained professionals with your best interest at heart. Others are salespeople disguised as advisors. And a few are outright frauds.
That’s why doing your homework before hiring a financial advisor is critical—especially if you’re retired or nearing retirement.
This guide will show you how to check if a financial advisor is legit, licensed, and trustworthy.
1. Verify Their Licenses and Registrations
Legitimate financial advisors are required to register with either the Securities and Exchange Commission (SEC) or a state regulatory agency. Many are also required to pass exams and obtain professional licenses.
Here’s how to check:
✅ Use the FINRA BrokerCheck
This tool lets you look up:
- Whether the advisor is registered
- Their professional history
- Any customer complaints or disciplinary actions
- Their firm and credentials
✅ Check the SEC’s Investment Adviser Public Disclosure (IAPD)
This is ideal for fee-only advisors registered as Investment Adviser Representatives (IARs).
You’ll find:
- Their employment history
- Business structure
- Disclosures (including criminal or civil proceedings)
Red flag: If they’re not listed in either database, or if they have multiple disciplinary marks, proceed with extreme caution—or walk away.
2. Understand Their Credentials
There are dozens of financial designations out there, but only a handful carry real weight.
Look for credentials like:
- CFP® (Certified Financial Planner) – rigorous training, ethics, and ongoing education
- CFA® (Chartered Financial Analyst) – strong background in investments and analysis
- CPA/PFS (Certified Public Accountant/Personal Financial Specialist) – for those with tax expertise
Beware of made-up titles like “retirement expert” or “wealth coach.” These sound impressive but don’t reflect any regulated training or exams.
You can verify credentials at:
- CFP Board
- CFA Institute
- NASAA.org for state-licensed professionals
3. Ask the Right Questions
A few smart questions can reveal a lot about your potential advisor’s approach—and honesty.
Ask these upfront:
- Are you a fiduciary at all times?
A fiduciary is required by law to act in your best interest. If they say “only sometimes,” that’s a problem. - How do you get paid?
- Fee-only: paid directly by you (best for transparency)
- Commission: earns money from selling products (potential conflict of interest)
- Fee-based: a mix of both
- What licenses or certifications do you hold?
- What services do you provide?
(Investment advice only? Retirement planning? Tax help? Estate planning?) - Can you describe your typical client?
- Have you ever been disciplined by a regulator or sued by a client?
Don’t be afraid to take notes—and don’t hire anyone who resists answering.
4. Check for Complaints or Disciplinary Actions
A fancy title doesn’t guarantee good behavior. That’s why it’s important to check their record.
Use BrokerCheck or IAPD to look for:
- Client complaints
- Suspensions or fines
- Terminations from previous firms
- Bankruptcies or criminal charges
One complaint isn’t necessarily a dealbreaker, but multiple complaints or unresolved issues are a major red flag.
5. Read Online Reviews—But Be Cautious
Google reviews and Yelp can give you a feel for how clients view the advisor—but take them with a grain of salt.
Tips:
- Look for patterns (Do multiple people mention high fees? Poor communication?)
- Check third-party sites like NAPFA.org or FeeOnlyNetwork.com
- Ask for references from current clients who are in similar financial situations
6. Avoid These Common Scams and Traps
Even registered advisors can steer you into products that aren’t in your best interest. Watch for:
🚫 Promises of guaranteed returns – No legitimate advisor can guarantee market returns.
🚫 Pushing annuities or insurance as a one-size-fits-all solution – Some annuities are appropriate, but if that’s all they recommend, beware.
🚫 Pressure to act fast – A trustworthy advisor will give you time to think.
🚫 Vague answers about fees – If you can’t clearly understand how they’re paid, something’s wrong.
7. Start With a Trial Period
Once you’ve chosen an advisor, don’t hand over full control of your finances right away. Instead:
- Ask for a written agreement outlining fees and services
- Start with a small project (like a retirement review or investment audit)
- Review your statements monthly and ask questions if something looks off
A great advisor will educate you, not confuse you.
Real-Life Example: The Retiree Who Didn’t Ask
George, a retired engineer, hired a local advisor recommended by a friend. The advisor promised “safe returns” and put most of George’s portfolio into high-fee annuities. George didn’t check credentials or read the fine print.
Later, George discovered that:
- The annuity had a 10-year surrender period
- He was locked in with penalties
- The advisor had earned a 7% commission upfront
Had George looked him up on FINRA’s BrokerCheck, he would’ve seen three prior complaints.
Don’t Let a “Bad Apple” Derail Your Retirement
There are thousands of ethical, highly trained financial advisors out there—but also some who care more about their commissions than your future.
With just a little research, you can protect yourself and find an advisor who will help you grow your retirement savings with integrity.
Here’s a quick checklist to verify your advisor:
✅ Look them up on FINRA’s BrokerCheck
✅ Verify licenses and credentials
✅ Ask if they’re a fiduciary at all times
✅ Get a clear explanation of fees
✅ Read online reviews and request references
✅ Avoid high-pressure tactics or too-good-to-be-true promises
Disclaimer: This article is for informational purposes only and does not constitute financial, legal, or investment advice. Always consult a licensed professional before making financial decisions. Regulatory databases and advisor credentials may change over time—do your due diligence carefully.