Choosing the right financial advisor is one of the most important financial decisions you'll make. The right advisor helps you build wealth, avoid costly mistakes, and achieve your goals faster. The wrong one can cost you thousands in unnecessary fees, poor advice, or conflicts of interest.
Here's exactly what to look for.
The Most Important Question: Are They a Fiduciary?
What Fiduciary Means
A fiduciary is legally required to act in your best interest at all times—not their own, not their company's, not their bottom line. Your interests come first, always.
Why This Matters
Non-fiduciary advisors only need to meet a "suitability" standard—meaning recommendations must be suitable for you, but not necessarily the best option. They can recommend products that pay them higher commissions even if better alternatives exist.
Example: A fiduciary must recommend a low-cost index fund if it's best for you. A non-fiduciary can recommend a higher-cost actively managed fund that pays them commissions, as long as it's "suitable."
How to Verify Fiduciary Status
Ask directly: "Are you a fiduciary 100% of the time?"
Request it in writing. True fiduciaries will gladly confirm their status in writing.
Red Flag: Advisors who say they're fiduciaries "when providing advice" but not when "implementing" recommendations. This loophole allows them to act in their own interest when selling products.
Fee Structure: How They Get Paid
Fee-Only Advisors
How They're Paid: Directly by you through hourly fees, flat fees, retainer fees, or asset-based fees.
Advantages:
- No conflicts of interest from product commissions
- Transparent pricing
- Typically fiduciaries
- Recommendations based solely on your needs
Fee Structures:
- Hourly: $150-$400/hour for specific questions
- Flat fee: $1,500-$5,000+ for comprehensive financial plans
- Asset-based: 0.5%-1.5% of assets managed annually
- Retainer: Monthly or quarterly fees for ongoing service
Best For: Anyone wanting unbiased advice without sales pressure.
Commission-Based Advisors
How They're Paid: Commissions from insurance companies, mutual fund companies, and investment firms when you purchase products.
Disadvantages:
- Clear conflict of interest—they earn more when you buy certain products
- Not fiduciaries
- May recommend products based on commission rather than your needs
- Hidden costs in product fees
Red Flags:
- Pushing specific insurance products heavily
- Frequent trading or product changes
- Reluctance to discuss compensation clearly
Fee-Based Advisors
How They're Paid: Combination of fees and commissions.
Considerations:
- Still creates potential conflicts of interest
- Not always fiduciaries
- Less transparent than fee-only
- May recommend commissioned products when fee-only alternatives exist
Best Practice
Work with fee-only fiduciary advisors to eliminate conflicts of interest and ensure recommendations are truly in your best interest.
Credentials and Qualifications
Top Credentials to Look For
CFP® (Certified Financial Planner)
- Most recognized and comprehensive financial planning certification
- Requires extensive coursework, exam, experience, and continuing education
- Must act as fiduciaries when providing financial planning
- Covers investments, taxes, estate planning, retirement, and insurance
ChFC® (Chartered Financial Consultant)
- Similar comprehensive training to CFP
- Requires 8 college-level courses and ongoing education
- Covers broad financial planning topics
CFA® (Chartered Financial Analyst)
- Investment management focused
- Extremely rigorous—only 20% pass rate
- Best for investment portfolio management
- Less emphasis on holistic financial planning
CPA/PFS (Certified Public Accountant/Personal Financial Specialist)
- CPAs with additional financial planning training
- Excellent for tax-focused financial planning
- Combines accounting expertise with financial planning
RICP® (Retirement Income Certified Professional)
- Specializes in retirement income planning
- Excellent for those approaching or in retirement
Credentials to Be Cautious About
Some "certifications" require minimal training and don't indicate true expertise:
- "Wealth manager" (not a regulated term)
- "Financial consultant" (not a regulated term)
- "Senior specialist" designations (often just sales training)
How to Verify Credentials
- CFP: Check at CFP.net
- CFA: Verify at CFAInstitute.org
- Financial advisors: Check FINRA BrokerCheck
- Investment advisors: Check SEC Investment Adviser Public Disclosure
Services Offered
Comprehensive Financial Planning
Look for advisors who address all aspects of your financial life:
Investment Management:
- Portfolio construction and management
- Asset allocation strategies
- Tax-efficient investing
- Rebalancing
Retirement Planning:
- Retirement readiness analysis
- Social Security optimization
- Pension decisions
- Required minimum distributions (RMDs)
- Withdrawal strategies
Tax Planning:
- Tax-efficient investment strategies
- Roth conversion analysis
- Tax-loss harvesting
- Charitable giving strategies
Estate Planning:
- Will and trust recommendations
- Beneficiary coordination
- Estate tax strategies
- Legacy planning
Risk Management:
- Insurance needs analysis (life, disability, long-term care)
- Asset protection strategies
- Emergency fund planning
Education Planning:
- 529 plan strategies
- College funding approaches
- Financial aid optimization
Cash Flow Management:
- Budgeting and spending plans
- Debt management strategies
- Savings strategies
Specialized Services
Some advisors specialize in specific areas:
- Small business owners
- Executives with stock options
- Retirees
- Sudden wealth recipients
- Divorcees
- Military families
Choose an advisor whose specialty matches your situation.
Experience and Track Record
Years in Business
- New advisors (0-5 years): May lack experience with complex situations and market cycles
- Mid-career (5-15 years): Balance of energy and experience
- Veteran advisors (15+ years): Extensive experience through multiple market cycles
Client Base
Ask about their typical client:
- Age range
- Income level
- Net worth
- Professions
- Common goals
Choose an advisor who regularly works with clients like you.
Minimum Asset Requirements
Many advisors have minimums:
- High minimums ($500,000-$1 million+): May not be accessible for newer investors
- Moderate minimums ($100,000-$500,000): Common for established advisors
- No minimums: Often fee-only planners who charge flat fees or hourly rates
Choose an advisor accessible to your current situation.
Client Retention
High client retention indicates satisfied clients. Ask: "What percentage of clients stay with you long-term?"
Communication and Accessibility
Meeting Frequency
Initial Planning: How comprehensive is the initial financial plan?
Ongoing Reviews: How often will you meet?
- Quarterly reviews for active planning
- Semi-annual for stable situations
- Annual minimum for most relationships
Ad Hoc Access: Can you reach them between scheduled meetings for questions or major life changes?
Communication Style
Preferred Methods:
- In-person meetings
- Video conferences
- Phone calls
- Email communication
Responsiveness: What's their typical response time for emails and calls?
Availability: Do you work with the advisor directly or support staff?
Technology
- Client portal for accessing accounts and documents
- Digital document signing
- Mobile app access
- Secure messaging
Investment Philosophy
Understand Their Approach
Active vs. Passive:
- Active management: Attempting to beat market returns through stock picking and timing
- Passive management: Index investing to match market returns at low cost
Research shows: Most active managers underperform passive index funds over time, especially after fees.
Evidence-based investing: Using academic research and data to guide investment decisions rather than predictions or market timing.
Questions to Ask
- What's your investment philosophy?
- Do you believe in market timing?
- What role do index funds play in your recommendations?
- How do you select investments?
- What's your track record? (Be skeptical of advisors guaranteeing specific returns)
Risk Management
- How do they assess your risk tolerance?
- How do they adjust portfolios during market volatility?
- How do they protect against losses while allowing for growth?
Team Structure
Solo Practitioner
Advantages:
- Direct relationship with one person
- Consistency in advice
- Personal attention
Disadvantages:
- Limited bandwidth
- Less specialization
- Coverage issues during vacations or illness
Team Approach
Advantages:
- Specialized expertise (tax, estate, investments)
- Better coverage and availability
- More resources
Disadvantages:
- May work with different people
- Less personal connection
- Communication across team members
Succession Planning
Ask: "What happens to my accounts if you retire or become unable to work?"
Established firms have succession plans ensuring continuity.
Transparency and Disclosures
Form ADV
All registered investment advisors must file Form ADV with the SEC. Part 2 is the disclosure brochure containing:
- Services offered
- Fee schedules
- Conflicts of interest
- Disciplinary history
- Business practices
Request this document and read it carefully.
Conflicts of Interest
Ask directly: "What conflicts of interest do you have?"
Common conflicts:
- Receiving commissions from product sales
- Affiliated companies providing services
- Proprietary investment products
- Revenue sharing arrangements
Disciplinary History
Check for:
- Customer complaints
- Regulatory actions
- Arbitrations or lawsuits
- License suspensions
Where to Check:
- FINRA BrokerCheck (for brokers)
- SEC Investment Adviser Public Disclosure (for RIAs)
Red Flags: Multiple complaints, patterns of problems, serious violations.
Colorado-Specific Considerations
Local Expertise
Colorado advisors understand:
- State tax implications (4.40% flat income tax)
- Colorado-specific retirement benefits (PERA for public employees)
- Cost of living in Colorado Springs vs. Denver
- Real estate market trends
- Local estate planning laws
Military Experience
Colorado Springs has significant military presence (Fort Carson, Peterson Space Force Base, Air Force Academy). Advisors experienced with:
- Thrift Savings Plan (TSP)
- Military pensions
- VA benefits
- Deployment financial issues
- Security clearance considerations
Retirement Planning in Colorado
Colorado attracts retirees, making retirement income planning expertise crucial:
- Social Security taxation (Colorado doesn't tax Social Security)
- Public pension optimization (PERA)
- Healthcare before Medicare
- Cost of living adjustments for retirement budgets
Questions to Ask Potential Advisors
About Their Practice
- Are you a fiduciary 100% of the time?
- How are you compensated? Can you provide a written breakdown?
- What credentials do you hold?
- How long have you been practicing?
- Who is your typical client?
- Do you have a minimum asset requirement?
- What services do you provide?
- Who will I work with directly?
About Their Approach
- What's your investment philosophy?
- How do you determine appropriate asset allocation?
- How often will we meet?
- How accessible are you between meetings?
- What's your process for developing a financial plan?
- How do you stay current with tax law changes and market developments?
About Their Business
- Can I see a sample financial plan?
- Can you provide references from current clients?
- Have you ever been disciplined by regulators?
- What happens if you retire or can't continue practicing?
- How do you get paid if I don't have investable assets yet?
Red Flags in Responses
- Evasive answers about compensation
- Guarantees of specific investment returns
- Pressure to act quickly
- Reluctance to provide Form ADV
- Dismissing the importance of credentials
- No clear investment philosophy
Making Your Decision
Compare Multiple Advisors
Interview at least 3-5 advisors before deciding. Compare:
- Fiduciary status
- Fee structures
- Credentials
- Experience with clients like you
- Communication style
- Investment philosophy
- Overall comfort level
Trust Your Gut
Beyond credentials and fees, choose someone you trust and feel comfortable with. You'll share intimate financial details—the relationship matters.
Start With a Trial Period
Many advisors offer project-based planning before committing to ongoing relationships. This allows you to evaluate their work and fit.
Review Annually
Even after choosing an advisor, review the relationship annually:
- Are you getting the value you're paying for?
- Are they accessible and responsive?
- Do you understand their recommendations?
- Is your financial situation improving?
Don't hesitate to change advisors if the relationship isn't working.
Frequently Asked Questions
Do I need a financial advisor if I'm just starting out?
Yes. Early career is when good habits and smart decisions have the biggest long-term impact. Many advisors work with young professionals through flat-fee or hourly arrangements.
Can I trust online robo-advisors instead of a human advisor?
Robo-advisors work for simple investment management but lack the comprehensive planning, tax strategies, and personalized guidance human advisors provide. They're best for straightforward investment-only needs.
How do I know if my current advisor is doing a good job?
Review: Are they proactively reaching out? Do they explain recommendations clearly? Are fees reasonable? Is your financial situation improving? Do you understand your financial plan?
Should I choose a local advisor or is remote fine?
Both work. Local advisors understand Colorado-specific issues and allow face-to-face meetings. Remote advisors expand your options and often provide excellent service via video. Choose based on expertise and fit.
What if I can't afford a financial advisor?
Many advisors offer hourly consultations or project-based planning for a few thousand dollars. Even one comprehensive planning session provides tremendous value and direction.
How often should I expect to hear from my advisor?
Expect scheduled meetings at least annually, with quarterly or semi-annual meetings for active planning. Between meetings, advisors should respond to questions within 1-2 business days.
Can a financial advisor guarantee returns?
No. Any advisor guaranteeing specific returns is either lying or breaking securities laws. Markets are unpredictable—advisors who claim otherwise aren't trustworthy.
Find the Right Financial Advisor Today
Choosing the right financial advisor is a decision that impacts your financial future for decades. Take the time to find someone who is a fiduciary, charges transparent fees, holds proper credentials, and truly understands your goals.
The right advisor doesn't just manage money; they become a trusted partner in building the financial life you've always dreamed of.
Schedule a consultation with EJC Insurance & Financial:
📞 Colorado Springs: (719) 685-8585
✉️ hello@ejcteam.com
Our team of experienced, credentialed financial advisors serves as fiduciaries, putting your interests first always. We provide comprehensive financial planning covering investments, retirement, taxes, insurance, and estate planning—all under one roof.
With decades of combined experience serving Colorado Springs families, we understand the unique opportunities and challenges you face. We offer transparent fee-only planning with no hidden commissions or conflicts of interest.
Whether you're just starting your career, navigating a major life transition, or planning retirement, we're here to provide the expert guidance and personalized service you deserve.
Find Your Trusted Financial Partner Today - Schedule Your Free Consultation!
