How to Choose the Right Financial Advisor for Your Business

by Finance Tools & Resources

  1. Introduction
    • The importance of a financial advisor for your business
    • Objective of the article
  2. Why Do You Need a Financial Advisor?
    • Expertise in financial planning
    • Risk management
    • Tax benefits
  3. Types of Financial Advisors
    • Robo-advisors
    • Traditional advisors
    • Specialized advisors
  4. Factors to Consider
    • Credentials
    • Specialization
    • Fees
  5. How to Research Potential Advisors
    • Internet search
    • Referrals
  6. Questions to Ask
    • Qualifications
    • Investment philosophy
    • Fees
  7. Red Flags to Avoid
    • Lack of transparency
    • Inconsistent track record
  8. The Consultation Process
    • Initial meeting
    • Expectations
  9. Creating a Financial Plan
    • Setting goals
    • Strategies
  10. Ongoing Relationship
    • Monitoring
    • Feedback
  11. What If It Doesn’t Work Out?
    • Terminating the relationship
    • Alternatives
  12. Conclusion
    • Summary
    • Final tips


So many female entrepreneurs and business owners know how to make money, but managing money can be as complex as a Rubik’s Cube. That’s where a financial advisor comes in. They can guide you through various investment options, tax benefits, and financial planning. In this article, we’ll explore the ins and outs of how to choose the right financial advisor for your business.

Why Do You Need a Financial Advisor?

Imagine hiking the Everest without a guide. Risky, right? A financial advisor is your financial compass, providing the expertise needed to navigate your business’s financial future. They can help you manage risk, optimize tax benefits, and even help your business grow through informed investment decisions.

Types of Financial Advisors

Just like there are different types of ships, there are different types of financial advisors.

  • Robo-advisors: Ideal for basic investment planning, but lack the personal touch.
  • Traditional advisors: Offer a wide range of services and personalized advice.
  • Specialized advisors: Focus on specific industries or types of clients.


What They Are: Robo-advisors are automated platforms that create and manage a portfolio for you based on your financial goals and risk tolerance. They use algorithms to optimize your investments.


  • Lower fees compared to traditional advisors.
  • Accessible 24/7, allowing you to make adjustments as you see fit.
  • Suitable for those with simpler financial situations.


  • Lack the personalized touch of a human advisor.
  • Limited in terms of the range of financial services they can offer.

Best For: Individuals or businesses looking for basic investment management with lower fees.

Traditional Advisors

What They Are: Traditional advisors are certified professionals who offer a wide range of financial planning services. This can include retirement planning, estate planning, tax strategies, and more.


  • Personalized advice tailored to your unique financial situation.
  • A wide range of services beyond just investment management.
  • Emotional support and judgment that can’t be replicated by a machine.


  • Higher fees, often based on a percentage of assets under management.
  • May require a minimum investment, which can be limiting for some.

Best For: Those looking for a more comprehensive financial planning service and who appreciate the value of human judgment in financial decisions.

Specialized Advisors

What They Are: These advisors focus on specific types of clients, industries, or financial planning areas. For instance, some advisors specialize in serving business owners, physicians, or even niche industries like tech startups.


  • Deep expertise in specific areas.
  • Tailored advice that generalists may not be able to provide.
  • Often up-to-date on specialized financial products and tax rules that apply to their focus area.


  • May be more expensive due to their specialized skill set.
  • Might not offer a full range of financial services if their focus is too narrow.

Best For: Those with unique or complex financial situations that require specialized advice.

So, whether you’re looking for a cost-effective, hands-off approach, a comprehensive financial planning service, or specialized advice tailored to your unique circumstances, there’s a type of financial advisor out there for you.

Factors to Consider

When choosing your financial advisor—you’ll want to consider several factors.

  • Credentials: Make sure to look for a Certified Financial Planner (CFP®) or a CFA® charter holder as this means they have extension experience with financial planning or investment management
  • Specialization: Does the advisor specialize in businesses like yours?
  • Fees: Understand the cost structure. Do they charge commissions, a percentage of the money that they manage, or an ongoing fee? Sometimes financial advisors that cater to younger clients or clients that don’t have a lot of money to manage will charge an average of $7,500 annually.

How to Research Potential Advisors

Doing your homework can save you headaches later.

  • Internet Search: Look into the CFP® Board website or CFA® website as those 2 are the best places to find a qualified financial advisor. Instagram and Google are also worth searching for!
  • Referrals: Word of mouth still holds weight. Ask business colleagues or friends for recommendations.

Questions to Ask Potential Financial Advisors

  1. What certifications do you hold?
    • You want to ensure the advisor has the proper certifications, such as CFP® or CFA®, to meet your specific needs.
  2. What is your educational background?
    • This can give you an insight into their expertise in finance, economics, or related fields.
  3. How long have you been in the financial advising business?
    • Experience often correlates with expertise, so it’s helpful to know how long they’ve been practicing.
  1. What types of financial planning services do you offer?
    • Determine if they provide the services you need, like tax planning, estate planning, or investment management.
  2. Do you specialize in any particular type of client or industry?
    • Specialization can be beneficial if you have unique financial needs.
  3. What is your investment approach?
    • Understand their investment philosophy to see if it aligns with your goals and risk tolerance.
  1. How are you compensated?
    • Knowing how they earn their money can help you understand any potential conflicts of interest.
  2. Do you have a fee schedule you can provide?
    • Transparency in fees is crucial; ask for a detailed breakdown.
  3. Is there a minimum investment requirement?
    • Some advisors require a minimum investment, which might not suit smaller investors or businesses.
  1. How frequently will we meet to review my financial plan?
    • Regular reviews are essential for tracking your progress.
  2. Do you provide ongoing advice between our scheduled meetings?
    • Find out if you can reach out with questions or concerns between meetings.
  3. Can I see a sample financial plan?
    • A sample can give you an idea of the depth and breadth of their financial planning.
  1. Have you ever been subject to disciplinary action?
    • This can be a red flag and is essential to know before proceeding.
  2. How do you measure success with your clients?
    • Knowing how they define success can help you determine if they align with your financial goals.

By asking these questions, you’ll arm yourself with the knowledge needed to make an informed decision. Remember, this is a long-term relationship that can significantly impact your financial future, so take your time to choose wisely.

Red Flags to Avoid

Red Flags to Avoid in a Financial Advisor

  1. Hidden Fees: If the advisor is not upfront about their fees or there are undisclosed costs that pop up later, that’s a significant red flag.
  2. No Fee Schedule: A reputable advisor will provide a clear fee schedule. If they can’t, you should be cautious.
  1. Lack of Credentials: If the advisor doesn’t have essential qualifications like CFA or CFP®, think twice.
  2. Disciplinary Actions: Any disciplinary action or ethical violations are clear red flags.
  3. High Turnover of Clients: If they can’t maintain long-term relationships with clients, you may want to consider why.
  1. Lack of Availability: If it’s challenging to get a hold of them or they are slow to respond to your inquiries, take note.
  2. One-Size-Fits-All Approach: Financial advising is deeply personal. If they offer a generic financial plan without considering your unique needs, steer clear.
  3. Poor Communication: An advisor should be able to explain complex financial topics in a way you understand. If they can’t, it may be time to look elsewhere.
  1. Aggressive Sales Tactics: Be wary if they push specific financial products or services too hard. They might be getting a commission.
  2. No Risk Assessment: If they don’t discuss risk tolerance or fail to incorporate it into your financial plan, that’s a red flag.
  3. Lack of Diversification: Advisors pushing for a lack of diversification, such as putting all your assets into a single investment, are to be avoided.
  1. No Interest in Your Financial Goals: The advisor should be keen to know what you’re working towards. If they don’t ask about your goals or disregard them, that’s problematic.
  2. Conflict of Interest: If your advisor sells financial products, make sure that they are not just recommending products from which they receive a commission.
  3. Overpromising Returns: Be wary of any advisor promising guaranteed or exceptionally high returns; if it sounds too good to be true, it probably is.
  4. Pressure to Act Quickly: Financial planning is often a long-term process. If the advisor pressures you for quick decisions, consider it a red flag.

Being aware of these red flags will arm you with the tools you need to select an advisor who is both reputable and aligned with your financial goals. Trust your instincts and don’t be afraid to ask questions or walk away if something doesn’t feel right. After all, it’s your financial future at stake.

The Consultation Process

This is like a first date where both parties gauge compatibility.

  • Discovery (Initial) Meeting: This is a place where the financial advisor will ask you about your goals and objectives.
  • Expectations: Make sure both parties are on the same page.

Creating a Financial Plan

This is your roadmap to financial success.

  • Setting Goals: These could range from investment growth to debt reduction.
  • Strategies: Specific plans to achieve your goals.

Ongoing Relationship

Communication is key.

  • Monitoring: Regular check-ins to review your financial plan.
  • Feedback: Discuss what’s working and what’s not.

What If It Doesn’t Work Out?

Sometimes things just don’t click.

  • Terminating the Relationship: Know how to sever ties if things don’t work.
  • Alternatives: Explore other advisors or options.


Choosing the right financial advisor is akin to picking the right tool for the job. It requires research, thoughtful questions, and a keen eye for red flags. Remember, this is a relationship that could shape the financial future of your business, so choose wisely!


  1. What is the difference between a CFA® and a CFP®?
    • A CFA® charter holder focuses more on investment management, while a CFP® covers broader financial planning. The both very important but only 0.04% of financial advisors have both designations as they are extremely hard to get (especially the CFA® charter).
  2. How often should I meet with my financial advisor?
    • This can vary but usually, bi-annual meetings are sufficient for most businesses.
  3. Can I switch advisors easily?
    • Yes, but consider any contractual obligations and possible fees.
  4. Do I need a specialized advisor for my type of business?
    • Not necessarily, but it can be beneficial.
  5. Is it worth paying higher fees for more experienced advisors?
    • This depends on your specific needs. More experience often equates to better advice, but it’s not a one-size-fits-all answer.

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Silvia Manent, Manent Capital

Silvia Manent, CFA, CFP®

Silvia is the Founder and Managing Partner of Manent Capital, a Boston-based wealth management firm that focuses on helping women understand their personal and business finances so that they can feel accomplished, confident and excited about investing in their future dream goals.


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