The listings featured on this site are from companies from which this site receives compensation. This influences where, how and in what order such listings appear on this site. To read our full disclosure, click here.
Choosing the right financial advisor is one of the most important decisions you can make for your financial future. The right advisor can help you grow your wealth, secure your retirement, and guide you through life’s financial twists and turns. But the wrong advisor? That could cost you dearly—both in money and peace of mind.
One of the biggest mistakes people make is not ensuring that their advisor is a fiduciary. A fiduciary is legally required to act in your best interest, unlike some advisors who may push products that benefit their commission more than your financial goals.
What to do: Use our recommended free, no-obligation matching tool by Datalign Advisory to find a trusted financial advisor. All of the financial advisors on Datalign Advisory’s matching platform are registered investment advisors and fiduciaries.
Not all financial advisors have the same level of experience or credentials. Some advisors may only have a limited background in financial planning or may lack certifications that indicate advanced knowledge. Choosing an advisor without the right qualifications can lead to poor advice.
What to do: Look for advisors with certifications like CFP® (Certified Financial Planner) or CFA (Chartered Financial Analyst). These credentials ensure that the advisor has been thoroughly trained in financial planning.
A 2019 Vanguard study found that a hypothetical advisor-directed $500K investment would grow to over $3.4 million over 25 years, while a self-managed portfolio would total $1.69 million – 50% less – over the same period. The study's advisor-managed portfolio averaged 8% annual growth over a 25-year period, compared to just 5% growth for a self-managed portfolio.
Not understanding how your advisor gets paid can be a costly mistake. Some advisors charge flat fees, hourly fees, or a fee based on a percentage of assets, while others earn commissions from the products they sell. If you don’t know how they’re being compensated, you might end up paying more in fees than necessary—or worse, they may recommend products that aren’t in your best interest just to earn a commission.
What to do: Make sure your advisor clearly explains how they get paid and what their fees are. Transparent, fee-only advisors typically offer the most unbiased advice.
Some financial advisors are more focused on selling than advising. They may pitch certain products that benefit them financially, like insurance policies or investment funds, even if those products aren’t right for you. If your advisor feels more like a salesperson than a partner in your financial success, you’re likely in the wrong hands.
What to do: Be wary of advisors who push products without understanding your entire financial situation. Choose someone who takes the time to understand your goals before recommending any solutions.
What to do: Ask your advisor about their specialties and ensure they have experience in the areas where you need the most help. Your advisor should be a good match for your unique financial situation.
What to do: Use Datalign Advisory’s free, no-obligation matching tool to find a trusted financial advisor. Every advisor is thoroughly vetted by Datalign Advisory
While it’s important to get along with your advisor, personality shouldn’t be the deciding factor. Just because someone is friendly or likable doesn’t mean they’re the right person to manage your financial future. Your advisor should be someone you can trust for their expertise and advice, not just their charm.
Here are seven common mistakes people make when choosing a financial advisor, and how you can avoid them to ensure your financial future is in good hands.
Choosing the right financial advisor is one of the most important decisions you can make for your financial future. The right advisor can help you grow your wealth, secure your retirement, and guide you through life’s financial twists and turns. But the wrong advisor? That could cost you dearly—both in money and peace of mind.
One of the biggest mistakes people make is not ensuring that their advisor is a fiduciary. A fiduciary is legally required to act in your best interest, unlike some advisors who may push products that benefit their commission more than your financial goals.
What to do: Use our recommended free, no-obligation matching tool by Datalign Advisory to find a trusted financial advisor. All of the financial advisors on Datalign Advisory’s matching platform are registered investment advisors and fiduciaries.
Not all financial advisors have the same level of experience or credentials. Some advisors may only have a limited background in financial planning or may lack certifications that indicate advanced knowledge. Choosing an advisor without the right qualifications can lead to poor advice.
What to do: Look for advisors with certifications like CFP® (Certified Financial Planner) or CFA (Chartered Financial Analyst). These credentials ensure that the advisor has been thoroughly trained in financial planning.
Not understanding how your advisor gets paid can be a costly mistake. Some advisors charge flat fees, hourly fees, or a fee based on a percentage of assets, while others earn commissions from the products they sell. If you don’t know how they’re being compensated, you might end up paying more in fees than necessary—or worse, they may recommend products that aren’t in your best interest just to earn a commission.
What to do: Make sure your advisor clearly explains how they get paid and what their fees are. Transparent, fee-only advisors typically offer the most unbiased advice.
Some financial advisors are more focused on selling than advising. They may pitch certain products that benefit them financially, like insurance policies or investment funds, even if those products aren’t right for you. If your advisor feels more like a salesperson than a partner in your financial success, you’re likely in the wrong hands.
What to do: Be wary of advisors who push products without understanding your entire financial situation. Choose someone who takes the time to understand your goals before recommending any solutions.
A 2019 Vanguard study found that a hypothetical advisor-directed $500K investment would grow to over $3.4 million over 25 years, while a self-managed portfolio would total $1.69 million – 50% less – over the same period. The study's advisor-managed portfolio averaged 8% annual growth over a 25-year period, compared to just 5% growth for a self-managed portfolio.
Financial advisors often have areas of expertise, and it’s important to choose one who matches your needs. For example, some advisors specialize in retirement planning, while others focus on tax strategies or investment management. If you choose an advisor who isn’t aligned with your specific financial goals, you might not get the expert guidance you need.
What to do: Ask your advisor about their specialties and ensure they have experience in the areas where you need the most help. Your advisor should be a good match for your unique financial situation.
Many people don’t take the time to check an advisor’s background before hiring them, which can be a critical mistake. Advisors can have past complaints, disciplinary actions, or even fraudulent behavior on their record. If you don’t check, you could end up working with someone who has a history of unethical practices.
What to do: Use Datalign Advisory’s free, no-obligation matching tool to find a trusted financial advisor. Every advisor is thoroughly vetted by Datalign Advisory
While it’s important to get along with your advisor, personality shouldn’t be the deciding factor. Just because someone is friendly or likable doesn’t mean they’re the right person to manage your financial future. Your advisor should be someone you can trust for their expertise and advice, not just their charm.
What to do: Focus on their qualifications, experience, and how well they align with your financial needs. It’s nice to like your advisor, but it’s more important that they have the skills to help you achieve your goals.
Avoid These Mistakes and Find the Right Advisor
Choosing a financial advisor is a big decision, and avoiding these common mistakes can help you find someone who truly supports your financial future.
If you’re unsure where to start, Datalign Advisory has made the process easier for you.
Their free tool matches you with fully vetted, qualified and proven financial advisors in your area. These advisors are legally required to act in your best interest and have been rigorously vetted. In just a few minutes, you can connect with a trusted advisor who aligns with your financial goals.
Choosing the right financial advisor is one of the most important decisions you can make for your financial future. The right advisor can help you grow your wealth, secure your retirement, and guide you through life’s financial twists and turns. But the wrong advisor? That could cost you dearly—both in money and peace of mind.
1. Not Choosing a Fiduciary
1. Not Choosing a Fiduciary
One of the biggest mistakes people make is not ensuring that their advisor is a fiduciary. A fiduciary is legally required to act in your best interest, unlike some advisors who may push products that benefit their commission more than your financial goals.
What to do: Use our recommended free, no-obligation matching tool by Datalign Advisory to find a trusted financial advisor. All of the financial advisors on Datalign Advisory’s matching platform are registered investment advisors and fiduciaries.
Not all financial advisors have the same level of experience or credentials. Some advisors may only have a limited background in financial planning or may lack certifications that indicate advanced knowledge. Choosing an advisor without the right qualifications can lead to poor advice.
What to do: Look for advisors with certifications like CFP® (Certified Financial Planner) or CFA (Chartered Financial Analyst). These credentials ensure that the advisor has been thoroughly trained in financial planning.
A 2019 Vanguard study found that a hypothetical advisor-directed $500K investment would grow to over $3.4 million over 25 years, while a self-managed portfolio would total $1.69 million – 50% less – over the same period. The study's advisor-managed portfolio averaged 8% annual growth over a 25-year period, compared to just 5% growth for a self-managed portfolio.
Not understanding how your advisor gets paid can be a costly mistake. Some advisors charge flat fees, hourly fees, or a fee based on a percentage of assets, while others earn commissions from the products they sell. If you don’t know how they’re being compensated, you might end up paying more in fees than necessary—or worse, they may recommend products that aren’t in your best interest just to earn a commission.
What to do: Make sure your advisor clearly explains how they get paid and what their fees are. Transparent, fee-only advisors typically offer the most unbiased advice.
Some financial advisors are more focused on selling than advising. They may pitch certain products that benefit them financially, like insurance policies or investment funds, even if those products aren’t right for you. If your advisor feels more like a salesperson than a partner in your financial success, you’re likely in the wrong hands.
A 2019 Vanguard study found that a hypothetical advisor-directed $500K investment would grow to over $3.4 million over 25 years, while a self-managed portfolio would total $1.69 million – 50% less – over the same period. The study's advisor-managed portfolio averaged 8% annual growth over a 25-year period, compared to just 5% growth for a self-managed portfolio.
What to do: Be wary of advisors who push products without understanding your entire financial situation. Choose someone who takes the time to understand your goals before recommending any solutions.
Financial advisors often have areas of expertise, and it’s important to choose one who matches your needs. For example, some advisors specialize in retirement planning, while others focus on tax strategies or investment management. If you choose an advisor who isn’t aligned with your specific financial goals, you might not get the expert guidance you need.
What to do: Ask your advisor about their specialties and ensure they have experience in the areas where you need the most help. Your advisor should be a good match for your unique financial situation.
What to do: Use Datalign Advisory’s free, no-obligation matching tool to find a trusted financial advisor. Every advisor is thoroughly vetted by Datalign Advisory
What to do: Focus on their qualifications, experience, and how well they align with your financial needs. It’s nice to like your advisor, but it’s more important that they have the skills to help you achieve your goals.
If you’re unsure where to start, Datalign Advisory has made the process easier for you.