Iowa Insurance Division Iowa State University Extension Investor Protection Trust


How to hire a financial advisor

Radio Transcript, 2 minutes 45 seconds, for use during week of April 21.

Description: Penny, Ira, and Susan discuss hiring a financial advisor

Announcer: Invest Wisely comes to you from Iowa State University Extension through a grant from the Investor Protection trust, providing investor education on the web at:

Ira: Penny several friends of mine have recommended that I think about hiring a financial advisor. I'm wondering what a financial advisor actually does and what advantages there would be for me in having a financial advisor.

Penny: People choose a financial advisor for different reasons. Some don't have the time, knowledge or motivation to plan and implement financial strategies on their own.

Susan: Our talks have helped both Ira and me become more comfortable with basic investing terms and knowledge, but I often wish I had someone who could help me look at my total financial situation.

Penny: That's another good reason to think about hiring a financial advisor. An inheritance or a complex retirement situation may prompt a person to seek out an advisor.

Ira: Although I'm retired now, I have questions about the current market and about handling the investments I already have so that I protect the principal and make good decisions for the future.

Penny: It sounds like both of you might be interested in talking to a financial advisor. Your first step should be to sit down and define your objectives. What services do you need? What questions do you have that a financial advisor might be able to help you with?

Susan: Are there different types of financial advisors? Might I be looking for someone different than Ira is?

Penny: Yes. You really have a lot of different choices in the types of financial advisors you can choose and what they can help you with. For instance, a registered representative, also called a stockbroker, recommends to clients which securities to buy and sell and earns a commission on all trades. A financial planner considers your total financial situation to develop a comprehensive financial plan.

Ira: Once I have my objectives in hand and have an idea of the type of advisor I'm looking for, what's the best way to find the right financial advisor for me?

Penny: Ask your friends and family for recommendations. But ask them specifically why they like the person they're recommending. Check with professional organizations like the Financial Planning Association. They can provide names of members in your area.

Susan: Thank you, Penny. As always, your information is very helpful.

Penny: You're welcome. And remember, for more information, visit the ISU Extension website at and look for 'Invest Wisely.'


Updated April 23, 2008