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6 Traits of Your Next Advisor

It’s obvious when you need help. When a confused and overwhelmed feeling hits, there’s no escaping it until you get help. The first place we turn to is the all knowing internet. There is all kinds of information available at the push of a button, yet objective, relevant, and timely advice is harder to find than it should be. Financial markets and the tax code have been around for decades and have only gotten more complicated. Once making the decision to hire professional help, deciding who to hire can be overwhelming. Make sure the one you choose has the following characteristics.

A Fiduciary Mindset

First and foremost, you want to find someone driven to serve you. Someone not only trustworthy, but actually puts your best interest ahead of everything else. You’d think that would be how every professional should operate. It’s not.

A fiduciary puts their clients interests ahead of their own and has a duty to preserve good faith and trust.

Guard against advisors that sell products (particularly annuities and insurance policies) and tell you what you “can’t do.”


It’s easy to assume that if a service is offered the person offering that service is fully competent to deliver it. So how do you know? An easy way is to see if the service provider has any licenses or certifications. Learn what effort must be gone to obtain and maintain the credential.

Financial / Investment Advisor

Not everyone who purports to be a financial advisor actually can give great financial advice. Many are simply interested in selling a specific product. Worse yet, they may be incentivized to sell a single company's product. There’s a cliche, “To someone who only has a hammer everything looks like a nail.” Insurance agents are the poster children for this type of behavior.

This industry has a plethora of three letter acronyms to be obtained. A very common one is CERTIFIED FINANCIAL PLANNER™, requiring course study, apprenticeship, ethical commitments, and ongoing education.

Tax Accountant

You might be surprised to learn that to prepare tax returns, there’s no credential required. Most people have heard of CPAs and Enrolled Agents (EA) who voluntarily pass proficiency tests and do yearly continuing education. Further complicating the matter is the fact that not all CPAs are tax experts. Some specialize in other areas of accounting and know very little tax. Make sure the person you select has experience working with individuals or businesses like yours.

When things go wrong, the IRS requires that the person representing you is an EA, CPA, or is a practicing attorney. An unlicensed tax professional, while experienced, may not be able to solve an audit or misunderstanding without you present.

Heart of a Teacher

Dave Ramsey requires professionals he allows to call themselves “Ramsey Trusted” to have this trait. It makes perfect sense once you think about it. Advisors should be willing to educate people about financial principles and help them make informed decisions about their money.

Complete Financial Education

Try asking your “financial advisor” the tax consequences of recommendations being made. You’re likely to hear something to the effect of, “I’m not a tax professional. I recommend you contact your tax advisor for the answer to that question.” What? Pause and answer a simple question: Are taxes a financial topic? Seriously. Are taxes a financial topic? Nobody I’ve posed this question to has ever said no. Of course taxes are a financial topic. If that’s true, why do most “financial advisors” not complete their education and learn the tax implications of investment decisions? There’s really no good answer.All financial advisors providing comprehensive advice should have competency in taxation. Don’t settle for an advisor with half an education!

If you choose to have two separate advisors, you must be willing and able to coordinate the two effectively. This means fully understanding financial language used and the whys of recommendations being made. Choosing separate advisors means mistakes will be made and opportunities will be missed.

Tech Savvy

All businesses these days rely on technology. It doesn’t matter if you are an internet startup or a home builder, technology will play a key role. It’s more common for businesses to use specialized software for their industry. Finding an accounting firm that understands the role technology plays in your business is critical. Most accountants use tax software and a computerized accounting system. Despite using these two computerized systems, getting data into or moved between these systems requires slow error-prone manual processes. A few firms these days proudly call themselves a “Cloud-Based Accounting Firm” focusing on using technology to automate processes and offer services in a more virtual, paperless setting. The end result is an accounting firm that can help your business be more efficient, more scalable, and draw more revenue.


When was the last time your advisor called and said, “I’ve got a great idea that will save you thousands.” Never? That’s never happened? Honestly I’m not surprised. Accountants sometimes are little more than historians documenting last month or year’s numbers. The truth is that it doesn’t matter how good we are with a pile of receipts on April 14th. Many of the most effective strategies aren’t reliant on simply filling out the IRS’s paperwork better. A change of behavior that can’t be done retroactively is often necessary. Try going back to last January and hiring your kids. Without a Delorean it can’t be done.

Notice: This generic information is not intended to be taken as tax, legal, benefits, financial, or HR advice. Since rules and regulations change over time and can vary (by industry, entity type, and locale), consult your accountant, lawyer, and/or HR expert for specific guidance.
Scott Patterson

Scott Patterson


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Certified Financial Planner Board of Standards, Inc. (CFP Board) owns the CFP® certification mark, the CERTIFIED FINANCIAL PLANNER™ certification mark, and the CFP® certification mark (with plaque design) logo in the United States, which it authorizes use of by individuals who successfully complete CFP Board’s initial and ongoing certification requirements.

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