Hiring a financial adviser isn't the right choice for everyone. There are numerous ways to achieve your financial goals, not all of which involve paying a professional.
Your options include managing your money yourself, consulting family members and friends or using a robo-adviser.
But if you find investing for the future utterly overwhelming or know your situation may be more complex than most people's, it may be time to call in a pro. Here are four tips to help you navigate the search for a financial adviser.
1. Decode professional titles. An adviser's fancy car, expensive clothes and lavish office will tell you only how he or she is spending money — not how well-qualified he or she is to help you manage yours.
Professional titles in the financial industry can be confusing, partly because they are used interchangeably. Here's a quick rundown on various financial titles:
Financial adviser. Generic term for anyone who provides financial advice in return for compensation
Broker or stockbroker. Buys and sells financial products on behalf of clients in exchange for a fee, commission or both. Must register with the U.S. Securities and Exchange Commission.
Investment adviser representative. Provides advice and makes recommendations in exchange for a fee. Must act as a fiduciary, putting your best interest ahead of his or her own.
Certified financial planner. Provides financial planning advice, and by virtue of this designation has an ethical obligation to act in your best interest
When entrusting your finances to someone else, qualifications matter, and it's best to seek advice from people who have passed education and certification requirements and will uphold ethics standards.
A good starting point?
A certified financial planner, said Shannon Pike, a vice president at Tanglewood Legacy Advisors in Houston and the current president of the Financial Planning Association.
"You absolutely should find someone who is certified or qualified," says Pike, a certified financial planner.
When you are unsure of a professional's credentials, the internet can help. Many certifying agencies offer online directories through which you can verify an adviser's certifications.
2. Interview candidates.
The Financial Planning Association recommends a 35-question checklist to help. The questions cover licenses, education, work philosophy and the like.
You are about to start a new relationship that ideally will be for the long term — and will focus on the often sensitive topic of money — so it's important to clearly outline your goals, Pike said. Are you seeking advice on specific financial topics or a whole range of services? How frequently do you want to communicate with your adviser and in what manner?
Pike recommends a conversation of no less than an hour with a potential adviser to ensure your questions and expectations are addressed.
3. Be honest. If you are seeking financial advice for the first time, it's important to be candid throughout the process. And you should expect the same from an adviser.
Rianka Dorsainvil asks prospective clients to fill out a questionnaire addressing their income, debt, financial needs and goals before she meets with them. Dorsainvil, a certified financial planner in the metro Washington, D.C., area, works primarily with millennial clients who are seeking advice for the first time.
At times, that screening process leads to her turning down a prospective client. For example, she may refer someone to an appropriate nonprofit organization when they are in severe debt.
"This is a relationship business, and making sure we have a connection is so, so important," Dorsainvil said.
4. Pay for what you get. You should be very skeptical of financial advice that is free or unsolicited. At the same time, sound advice costs money, and if you want help, you will need to pay for it.
Many people believe financial advice is reserved only for the wealthy. After all, advisers often require that clients have a minimum amount of assets under management ($250,000 is common). But that's not universal.
Fees should be one of many factors you consider, but Pike said they shouldn't be the determining one, especially if you are selecting among a group of qualified professionals. Still, make sure you understand what you will be charged in advance.
For clients not ready for the holistic approach to financial planning, Dorsainvil recommends finding advisers who will work on a project-specific basis. If you are struggling with a specific need, such as setting up your 401(k) or selecting the right insurance, that might cost a few hundred dollars, she says.
If you need an adviser to deal with a specific need, the National Association of Personal Financial Advisors' directory can be a good place to start your search.
Anna-Louise Jackson is a writer at NerdWallet.