how to vet a financial advisor

the title means nothing

There is no license required to call yourself a "financial advisor" or a "financial planner." Titles in financial services are marketing — the protection comes from three things underneath: the legal standard they're held to, who regulates them, and how they get paid.

All three are public record, free to check, and take about as long as reading a restaurant menu.

fiduciary vs. everyone else

This is the single most important distinction, and it's structural rather than moral. It isn't about whether someone is a good person — it's about whose side the person across the table is legally required to be on when the interests don't align.

Fiduciary standard. Registered Investment Advisers, generally under the Investment Advisers Act of 1940, must act in your best interest at all times.

Suitability / Regulation Best Interest. Brokers operate under a lower bar — a recommendation must be reasonably suitable or in your "best interest" at the point of recommendation. The SEC's 2019 Reg BI raised it somewhat, but there are carve-outs and the enforcement track record is mixed.

fee-only vs. fee-based — one word, big difference

These two terms are nearly identical and mean opposite things, which is not an accident.

Fee-only means the advisor is compensated solely by you — no commissions, no kickbacks, no referral fees. Fee-based means they charge you and can earn commissions on what they sell you. As one plain summary puts it, the conflict is real: they may recommend an annuity that pays them a 5% commission when a simple index fund would serve you better.

the 60-second background check

Do this for anyone you're considering, no matter who referred them.

1. FINRA BrokerCheck (brokercheck.finra.org). Shows registrations, firms they've been associated with, and disclosures — customer complaints, regulatory actions, terminations.
2. SEC's IAPD (adviserinfo.sec.gov). Confirms whether a person or firm is registered as an investment adviser, and gives you the Form ADV.
3. Read Form ADV Part 2A — the "brochure." Every RIA files it, and it spells out how the firm is compensated, what conflicts of interest exist, and what services are actually offered. Dull reading, most direct paper trail available.
4. Verify credentials. CFP® status can be confirmed at cfp.net/verify. CFP, CFA, and ChFC signal education and competence — but only the RIA registration guarantees the fiduciary standard.

the questions, and the answers you want

• "Are you a fiduciary at all times when working with me?" Then: "Is that in writing?" A real fiduciary answers both without hesitation. If you get "we act in a fiduciary capacity," that's a hedge, not a yes.
• "Do you receive any compensation, in any form, from third parties for anything you recommend to me?" You want a clean no, or a specific, complete yes.
• "How exactly are you paid, and what will this cost me in dollars in year one?" Percentage-of-assets, hourly, flat fee, or subscription — and the dollar figure, not just the percentage.
• "What regulatory body oversees you, and can I look you up on BrokerCheck?" If someone can't tell you whether they're an investment adviser, a broker-dealer rep, or both, that itself is a red flag.
• "What happens if I want to leave?" There should be no penalty. Assets transfer in kind, typically within a couple of weeks.

do you even need one?

Honestly, often not yet. If your situation is a steady paycheck, a 401(k), and an index fund, you may be doing everything an advisor would tell you to do.

Where one earns their fee: equity compensation, self-employment, a divorce or inheritance, multiple states, a business, caring for aging parents, or the years right around retirement when the sequencing decisions get genuinely complex.

And if you want help without handing over assets, hourly and flat-fee planners exist — Garrett and XY are built for exactly that. You can buy three hours of advice, get a plan, and implement it yourself.

the bottom line

The financial industry's language is confusing in ways that reliably benefit the person selling. "Advisor," "fee-based," "acts in a fiduciary capacity" — each one sounds like the safe version of itself.

You don't have to decode all of it. You have to check two free databases and ask one question twice.

Your next tiny step: if you already work with someone, look them up on BrokerCheck tonight. You're not accusing anyone of anything — this is simply how these relationships are meant to be evaluated, and a genuine fiduciary expects it.