Guide to Choosing a Financial Advisor–Step 1 [Infographic 1]

How to Select a Financial Advisor–Step 1: Find Out Who They’re Working For [Infographic 1]

Choosing a financial advisor can be difficult. You first need to understand how all their different compensation structures work...

We all need money: for food, for clothes, for shelter, for our lifestyles.

You have a job to make money. When you go to work, you do whatever you’re supposed to do to continue getting paid.

If your employer incentivizes you with a bonus, you are likely to do everything within your power to hit their targets and bring home that extra cash.

When you choose a financial advisor, remember: this is their job. They, too, need to make money. They, too, will be tempted and influenced by their incentive structure.


When making this decision, Mr. and Ms. Client, it is your job to discern the underlying motivations of the person trying to sell you their services.

Your first screening questions should be:

  • What will make the rep the most money?
  • How do your actions affect their compensation?
  • Are their interests aligned with yours?

Put yourself in their shoes--trying to make as much money as possible--and consider these questions. It is not bad for them to want to make a lot of money. In fact, you may even want, or at least expect, that desire in a successful financial advisor.

Your challenge is to ensure their ambition is not in conflict with your goals. You want a situation in which the only way they make more money is if you, too, are making more money.

Ensure that the only way your financial rep makes more money is if you, too, are making more money.

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If so, great!

If not, please do yourself a favor and keep looking. There is a better fit for you out there.

Here is a summary of the information you’ll find in the infographic below--your financial advisor compensation options:

How does your rep make money - make sure their interest aligns with yours!

Use the infographic below to navigate some of the most common compensation structures with their respective pros and cons.

I’ve also created a flowchart to aid you with this important life decision--look for it next week in the [Infographic 2 of 2] post!

Also, coming soon: “How to Select a Financial Advisor--Step 2...”


Find out what will make your rep the most money. You want their interests to be aligned with yours!

Stephen Spicer

Stephen Spicer, CFP®, AEP®, CLU® is the founder and managing director of Spicer Capital, LLC. He is married to his high school sweetheart, and they have three amazing boys.

  • Bablofil says:

    Thanks, great article.

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