You probably put a lot of time and energy into selecting a financial advisor – as well you should! The person guiding you on your money holds a critical and even sacred role in your life.

But when was the last time you sat down and thought through a formal performance evaluation? You might not even know how to go about it – and that’s what this checklist is for.

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What the financial advisor checklist covers

Knowing whether you’re with the right financial advisor means considering a lot of different angles. There are communication skills—an effective advisor will keep you informed, provide clear, comprehensible insights and maintain regular contact, especially during turbulent times in the market.

Then there’s investment performance. Are they able to deliver competitive returns without exposing your investments to unnecessary risks? After all, you want to make sure their strategies align with your personal financial goals and risk tolerance.

Finally, you want to feel you can trust them. A lot of that comes from the strength of your relationship, but there are also external factors, like regulatory compliance.

Combining these kinds of checkpoints will give you a well-rounded view of your advisor’s effectiveness and answer the question “Is my financial advisor any good?”

Is there a system for evaluating financial advisors?

There isn’t a formal rating system for advisors, but third-party review sites and publications often create rating systems based on multiple quantitative and qualitative factors. These ratings may be a ranking of size or can be indicative of an advisor's adherence to industry best practices and their ability to effectively communicate and build trust with clients.

However, it's important to understand that while ratings could provide some insight when picking an advisor, they may not be as relevant for you – because you have your own personal experience to draw from when deciding if your advisor is a good fit.

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8 categories to consider

You should be able to agree with all these statements. If you can’t, that’s a sign something may be amiss, and you might need to look for a better fit.

1. Do you feel positive about the way they're managing the relationship?

• I feel comfortable talking with my advisor.
• I look forward to conversations and feel good when they end.
• My advisor explains recommendations clearly and in a way I can understand.
• I receive regular updates and responses to my questions, especially during market volatility.
• My advisor proactively keeps me informed about changes to my portfolio or the markets.
• My advisor cares about me, my family and continuing to build the relationship.

2. Are you getting appropriate advice and services?

• My advisor provides advice and services that are of clear value. (Think of the services you receive and consider if you’d be unhappy if any of them stopped. If you wouldn’t miss them, they aren’t of value.)
• My advisor is proactive in offering any new advisory services that would be valuable to me.
• My advisor considers my full financial picture when making recommendations.
• My advisor guides me on appropriate updates to my financial plan when something changes in my life.

3. Are you satisfied with your advisor’s investment performance?

• My returns are competitive for someone with my goals, risk tolerance and personal situation.
• I understand what benchmarks to compare my investments with.
• I understand my portfolio’s risk level and why we chose it.
• My advisor sets realistic expectations for my portfolio’s performance vs. overall market performance.

4. Are you happy with your advisor’s asset management?

• I’m generally comfortable with the market fluctuations in my portfolio balance.
• If and when I’m uncomfortable, my advisor listens and resolves my discomfort (either by talking it through or changing my allocation).

5. Do you receive effective advice when things are volatile?

• My portfolio is properly positioned for a range of markets including inevitable bouts of volatility.
• The advice I receive when the markets and/or economy are shifting makes sense and is comforting.
• My advisor keeps me up to date on their thoughts and perspectives about the volatility.

6. Does your advisor have a team backing them up?

• My advisor lets me know who to contact when they’re unavailable.
• My advisor has a team that can handle day-to-day requests quickly and efficiently.
• My advisor arranges access to experts when needed for special situations like tax or estate guidance.

7. Do you feel good about costs and fees?

• I understand the fees I’m paying and receive transparent communication regarding them.
• The total costs I’m paying are competitive for the investments and services I receive.

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Check in once a year

Fill out your advisor report card annually to help ensure you’re still happy with their communication, your relationship and how they’re helping you plan for the future. If you’re looking for a good financial advisor, we hope you’ll consider speaking with one of our financial advisors at ��Ѩ��Ƶ as part of your search.