Kelly's Notes

Evaluating Your Financial Advisor

January 25, 2019

Too often, consumers hire an advisor without considering the quality of their selection. Even when you carefully choose an advisor, complacency can set in. As a result, many consumers fail to fully evaluate their advisor.

Here are eight categories you should consider when evaluating your advisor:

Your Relationship:

Do you feel comfortable talking with your advisor? Do you look forward to conversations, and when done, are you happy to have had the conversation?


Is your advisor a fiduciary? Are they obligated to provide advice based on your best interest (not those of the advisor or broker)?

Services Provided:

Is your advisor delivering services of value to you? Think of all the services you get and ask if you'd be unhappy if any of them ceased. If you wouldn't miss them, they aren't of value.

Also think of services you'd like to receive but aren't currently receiving. Have you asked your advisor to provide them?

Investment Performance:

Are your returns competitive, based on your goals, risk tolerance, and personal situation? You should have a benchmark relevant to your situation for comparison purposes; your advisor can provide one for you.

Investment Risks:

Has your account fluctuated in value beyond your comfort level? If so, have you discussed this with your advisor, and are you satisfied with the results of that conversation (i.e. your investments were changed to better reflect your comfort level, or your advisor's explanation made you more comfortable with the level of volatility you're experiencing)?


In times of economic volatility, is your advisor still equipped to effectively advise you? Has your advisor kept you up-to-date on his thoughts and perspective? Is your portfolio still properly positioned?

If your advisor has been making or suggesting major changes in your investments, he may have lost confidence in his prior advice — rendering suspect the confidence you can place in his current advice. Even worse would be an advisor who does not seem able to articulate an effective, cohesive strategy going forward. And worst of all would be an advisor who has been and continues to be completely silent — no calls, no emails, no letters, no contact and no responses to yours.

Team-based or Solo:

There is a lot of value in team practices vs. solo advisors. Don't assume your advisor is part of a team just because he works at a national bank, insurance company or brokerage firm. In most firms, each advisor works independently, with little to no regard for the advice, services or strategies provided by others in the firm. Clients working with solo advisors are thus more dependent on the actions and decisions of that advisor than those who work as part of a team. Teams also provide greater depth and experience.


Are the total costs you're paying competitive? It is foolish to try to seek the lowest costs possible, but it is equally foolish to be paying costs significantly higher than those available elsewhere. Your advisor can benchmark costs for you, and a quick Internet search or a few calls to other firms can give you an idea of what others charge.

Remember there's always a trade-off between costs and services/quality, and those you contact will try hard to convince you to switch firms. Therefore, it's important when exploring costs that you examine all costs — not just the advisor's fee, but also the costs of the investments the advisor has recommended for you.

Regulatory Compliance:

Maybe you checked with FINRA, the SEC, and state regulators before hiring your advisor to make sure he had a clean record. But how do you know that there haven't been complaints, violations, or fines issued in the years since you've been a client?

Checking your advisor's background every 3–5 years is a good idea.

If you have any questions, call us at 208-343-2001 or drop us an email at

Kelly Wood & Eric Tarver
1101 W River Street, Suite 170
Boise, ID 83702

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