By Matt Gagnon, CFA® | Financial Empowerment
Choosing a financial advisor is one of the most important financial decisions you’ll ever make. The right one can help you build wealth, avoid costly mistakes, and feel confident about your financial future. The wrong one can cost you tens of thousands in fees, commissions, and bad advice — without being accountable for it.
The problem is, if you’re not familiar with the financial services industry, it can be confusing to tell the difference.
Here’s what to actually look for.
1. Are They a Fiduciary — All the Time?
This is the most important question you can ask, and many never ask it.
A fiduciary financial advisor is legally required to act in your best interest at all times. Sounds like the baseline standard, right?
Shockingly, it isn’t.
Many financial “advisors” — including some at large brokerage firms — operate under a weaker “suitability” standard, meaning they only have to recommend products that are suitable for you, not necessarily best for you. That distinction allows them to recommend higher-commission products when lower-cost alternatives may exist.
What to ask: “Are you a fiduciary 100% of the time, and will you put that in writing?”
If they hesitate, change the subject, or say “it depends” — walk away.
At Financial Empowerment: I’m a fiduciary — full stop. Financial Empowerment is a Registered Investment Advisor (RIA), a firm category held by law to the fiduciary standard. As a state-registered RIA representative and a CFA® charterholder, I’m legally and ethically required to put your interests before my own. Every time. That’s not a marketing line.
You can verify my RIA registration (and that of any advisor) at adviserinfo.sec.gov.
2. How Do They Get Paid?
How an advisor gets paid directly determines whose interests they’re serving. There are three main models:
Commission-based: The advisor earns money when you buy financial products — insurance policies, mutual funds, annuities. The more they sell, the more they earn. This creates an obvious conflict of interest.
AUM (Assets Under Management): The advisor charges a percentage of the assets they manage — often around 1% annually. Their fee grows when your portfolio grows, aligning their interests with yours.
Flat fee / Project-based: A set fee for a defined scope of work — a one-time financial plan or an ongoing planning retainer. Works well for people who want planning without investment management.
What to watch out for: Advisors who can’t clearly explain how they’re compensated, or who earn hidden commissions on top of management fees.
At Financial Empowerment: We are a fee-only financial advisor, meaning the only way we get paid is fees from clients. These are our services and fees:
Investment Management (Cornerstone):
- Under $500K: 1.25% annually
- $500K–$999K: 1.00% annually
- $1M–$2M: 0.75% annually
- $2M+: 0.50% annually
- Minimum annual fee: $3,000
Financial Planning:
- Origin (90-Min Clarity Session): $1,000 flat
- Quest: Pathfinder (One-Time Plan): Starting at $5,100
- Quest: Legacy (Complex Plan): Starting at $7,500
- Journey (Ongoing Planning): $460/month
No hidden fees. No commissions. No surprises.
3. What Are Their Credentials?
While they may look impressive, not all financial advisor credentials (the letters after an advisor’s name) are equal. Some designations require years of study and low pass-rate exams. Others can be completed in a few months.
To help you evaluate advisors,I’ve ranked nine of the more common financial designations you’re likely to see by difficulty. The ratings reflect four factors: number of exams required, pass rates, prerequisite education and experience requirements, and total time investment. Note that these are my estimates based on publicly available data from each awarding body — individual experiences may vary.
🥉 = single exam with no formal experience prerequisite, completable in under six months.
🥈 = multiple exams or a single high-stakes exam, require two or more years of professional experience, and typically take one to three years to complete.
🥇 = multi-year education required before sitting for exams. Sequential exams with low pass rates. Require thousands of hours of professional experience and take 4+ years to complete.
Ratings do not imply superiority for every situation — the right advisor for your situation depends on the type of service you need.
🥉 — Challenging
AIF® – Accredited Investment Fiduciary
Awarded by: Broadridge Fi360
Focus: Fiduciary investment standards and prudent investment process, primarily for retirement plan management (401k, 403b, pensions)
- Exam: Single online proctored exam (~80 questions)
- Education: Self-study or instructor-led training through Fi360
- Experience: None required
- Typical cost: ~$1,500–$2,500
- Time to obtain: 1–3 months
- Designees: 10,000+ across Fi360’s fiduciary designation programs as of 2017; current figures not publicly disclosed (Source: Fi360)
What it signals for you: Formal training in fiduciary standards — particularly relevant for employer retirement plan management. A positive signal for individual investors, though less meaningful as a standalone personal planning credential.
CRPC® – Chartered Retirement Planning Counselor
Awarded by: College for Financial Planning
Focus: Retirement income strategies, Social Security optimization, transitioning from accumulation to distribution
- Exam: Single online, closed-book exam (~3 hours, 70% to pass)
- Education: Self-study course completed within 120 days
- Experience: None required
- Typical cost: ~$1,300–$1,800
- Time to obtain: 3–6 months
- Designees: 25,539 as of 2023 (Source: College for Financial Planning – Kaplan Fact Book, 2023/2024)
What it signals for you: Retirement-specific knowledge — a useful niche credential, but narrower in scope than CFP®, ChFC®, or CFA®. Best viewed as a retirement specialization rather than a comprehensive planning qualification.
🥈 — Rigorous
CIMA® – Certified Investment Management Analyst
Awarded by: Investments & Wealth Institute
Focus: Investment consulting — asset allocation, portfolio construction, manager due diligence, and performance measurement
- Exam: 4-hour computer-based certification exam after completing an executive education program
- Education: Executive program at a university partner (e.g., Yale, Wharton) including online and in-person modules
- Experience: 3+ years of verified financial services experience plus background checks
- Typical cost: ~$5,000–$9,000
- Time to obtain: 6–12 months
- Designees: Designees: ~9,000 worldwide (Sources: UWorld Efficient Learning; Investments & Wealth Institute)
What it signals for you: Specialized expertise in portfolio construction and investment consulting. Most relevant for clients with larger or more complex portfolios.
CPWA® – Certified Private Wealth Advisor
Awarded by: Investments & Wealth Institute
Focus: Planning for high-net-worth clients ($5M–$25M+) — advanced tax strategies, executive compensation, concentrated stock, business exits, and asset protection
- Exam: 4-hour certification exam after completing an executive education program
- Education: Wealth management program at a university partner (e.g., Yale, Chicago Booth)
- Experience: Bachelor’s degree or accepted designation (CFA®, CFP®, ChFC®) plus 5 years of financial services experience and background checks
- Typical cost: ~$7,400–$7,700
- Time to obtain: 9–12 months
- Designees: 4,084 worldwide as of end of 2024 — one of the smallest and most specialized groups (Source: WealthManagement.com)
What it signals for you: Highly specialized training for complex, high-net-worth situations. Most relevant for business owners, executives, and families with concentrated wealth and significant tax planning needs.
ChFC® – Chartered Financial Consultant
Awarded by: The American College of Financial Services
Focus: Advanced personal financial planning with added depth in real-world scenarios — small businesses, complex families, special-needs planning
- Exam: 8 proctored, closed-book final exams (one per course)
- Education: Eight graduate-level courses through The American College
- Experience: 3 years of full-time business experience within the past 5 years
- Typical cost: ~$5,000–$6,000
- Time to obtain: 18–24 months
- Designees: Designees: 50,000+ professionals have earned the ChFC® designation (Source: The American College of Financial Services).
What it signals for you: Comprehensive planning depth comparable to CFP®, with added focus on complex family and business situations.
🔗The American College – ChFC® | FINRA – ChFC®
CLU® – Chartered Life Underwriter
Awarded by: The American College of Financial Services
Focus: Advanced life insurance, estate planning, and business succession — one of the oldest financial designations in existence, founded in 1927
- Exam: 8 proctored, closed-book final exams (one per course)
- Education: Eight graduate-level courses through The American College covering insurance law, estate planning, and business risk
- Experience: 3 years of full-time business experience within the past 5 years
- Typical cost: ~$4,000–$6,000
- Time to obtain: 18–24 months
- Designees: 113,000+ — one of the largest designations in the industry (Source: The American College of Financial Services)
What it signals for you: Deep expertise in life insurance, estate planning, and business succession. Most relevant if your situation involves significant insurance needs, a family business, or complex estate structures.
CFP® – Certified Financial Planner
Awarded by: CFP® Board
Focus: Comprehensive financial planning — retirement, tax, insurance, estate planning, and investments
- Exam: Single six-hour exam, 170 questions, offered 3x per year; pass rate ~60–65%
- Education: Board-approved college-level program (6–8 courses)
- Experience: 4,000–6,000 hours (~2–3 years) of relevant planning experience
- Typical cost: ~$5,000–$8,000 total (education + $825–$1,025 exam fee)
- Time to obtain: 18–36 months
- Designees: ~103,000 in the U.S. as of 2024; 223,000+ worldwide (Source: CFP Board via SmartAsset; InvestmentNews)
What it signals for you: The most widely recognized comprehensive planning credential and the benchmark most clients should use when evaluating a planning-focused advisor. CFP® professionals must act as fiduciaries when delivering financial advice.
🔗CFP® Board | Verify a CFP® Professional
🥇 — Elite
CFA® – Chartered Financial Analyst
Awarded by: CFA® Institute
Focus: Investment analysis, portfolio construction, risk management, and ethics. The global gold standard for investment professionals
- Exam: Three sequential exams. Level I (4.5 hours, 180 multiple-choice questions), Level II (4 hrs 24 min, vignette-based item sets), and Level III (4 hrs 24 min, vignette item sets plus constructed-response essays). Recent pass rates: ~43–46% for Level I, ~39–59% for Level II, and ~47–50% for Level III (Source: CFA Institute; Soleadea)
- Education: ~300 hours of self-directed study per level covering economics, statistics, equity valuation, fixed income, alternative investments, derivatives, portfolio theory, and ethics
- Experience: 4,000 hours of qualified, investment decision-making work experience completed over a minimum of 36 months, plus 2–3 professional references (Source: CFA Institute; FINRA)
- Typical cost: ~$3,000–$5,000+ for registration, exam fees, and study materials across all three levels (Source: CFA Institute; 300hours.com)
- Time to obtain: Minimum 3 years; most candidates take 4–6 years
- Designees: ~200,000+ worldwide (Source: CFA Institute; as of September 2024)
What it signals for you: Institutional-grade investment expertise applied to your personal portfolio — the same analytical rigor used by portfolio managers at the world’s largest investment firms. Fewer than 1 in 5 candidates who begin ever earn the charter. Fewer than 2% of financial advisors working directly with individual clients hold this designation. It is genuinely rare at the retail level.
CPA – Certified Public Accountant
Awarded by: AICPA (licensed by individual state boards)
Focus: Accounting, auditing, taxation, and financial reporting — the foundational credential for accounting professionals
- Exam: Four sections of the Uniform CPA Exam (Auditing, Business, Financial Accounting, Regulation) — each requiring 75%+ to pass; per-section pass rates run roughly 45–60%
- Education: 150 semester credit hours — typically a bachelor’s degree plus graduate coursework
- Experience: 1–2 years of supervised accounting experience (varies by state)
- Typical cost: ~$3,000–$5,000 for exam fees and materials, plus full education costs
- Time to obtain: 5–7 years from start of education to licensure
- Designees: ~670,000+ active licensees in the U.S.
What it signals for you: Exceptional tax and accounting depth that most financial advisors simply don’t have. When paired with a PFS or CFP®, the tax integration is unmatched. Best for situations involving a business, real estate, stock options, or multi-year tax strategy. The CPA is the only designation on this list requiring a state-issued license with ongoing regulatory obligations.
Quick Reference Guide
You don’t need your advisor to have every designation on this list. What matters is that their credentials match what you actually need:
| Designation | Awarding Body | Difficulty | Best For |
|---|---|---|---|
| AIF® | Broadridge Fi360 | 🥉 | Retirement plan fiduciary |
| CRPC® | College for Financial Planning | 🥉 | Retirement income planning |
| CIMA® | Investments & Wealth Institute | 🥈 | Portfolio consulting |
| CPWA® | Investments & Wealth Institute | 🥈 | High-net-worth planning |
| ChFC® | The American College | 🥈 | Comprehensive planning |
| CLU® | The American College | 🥈 | Insurance & estate planning |
| CFP® | CFP Board | 🥈 | Comprehensive planning |
| CFA® | CFA Institute | 🥇 | Investment management |
| CPA | AICPA / State Boards | 🥇 | Tax & accounting |
In my case, I hold the CFA® charter — the most rigorous investment credential in the profession — and am currently pursuing the CFP® certification to add comprehensive financial planning skills. For tax-intensive situations, I coordinate directly with your CPA to ensure your investment and tax strategies are fully aligned. You can verify my CFA® charter at cfainstitute.org.
Disclaimers: Cost and time estimates reflect typical candidate experience and may vary based on study materials chosen, exam retakes, and education provider. Sources: CFA Institute, CFP Board, The American College of Financial Services, Investments & Wealth Institute, Broadridge Fi360, AICPA, FINRA Designations Database, 300hours.com, SmartAsset.
4. Do They Actually Listen?
The best financial advisors spend more time listening than talking in your first meeting. They want to understand your goals, your fears, your family situation, and what you’ve tried before — before recommending anything.
Red flags in the first conversation:
- They pitch products or strategies before asking about your goals
- They spend most of the meeting talking about their firm
- They give you a proposal before your second meeting
- You feel rushed or pressured at any point
What great advisors do: Ask open-ended questions. Take notes. Reflect back what they heard. Explain their thinking before recommending anything. Make the process feel collaborative, not transactional.
At Financial Empowerment: Our first step is always a free 30-minute call — no pitch, no proposal, no pressure. I’ll ask about your goals, your current situation, and what you’re hoping to change. If I can help, I’ll tell you how. If I’m not the right fit, I’ll point you in the right direction.
5. Is Their Investment Philosophy Simple and Transparent?
Warren Buffett has said that “a low-cost index fund is the most sensible equity investment for the great majority of investors” — and he backed it up with a $1 million bet that a simple S&P 500 index fund would outperform actively managed hedge funds over 10 years. He won decisively. (Sources: Berkshire Hathaway Shareholder Letters, 2016 and 2017; Reuters)
Decades of data back him up. Yet the financial industry continues selling complex, high-fee products because complexity is profitable for advisors, not for clients.
A good advisor should be able to explain their investment philosophy in plain English, tell you exactly what you’ll own and why, and show you the total cost of your portfolio.
Questions to ask:
- “Do you use active or passive funds — and why?”
- “What’s the average expense ratio of the portfolios you build?”
- “How often do you trade, and does that create tax consequences for me?”
At Financial Empowerment: We believe simple beats complex. We build custom, low-cost portfolios aligned to your goals and risk tolerance. Full transparency is a core principle: you will always understand what you own and why. We also minimize tax impact where possible, because keeping more of what you earn matters as much as what you earn.
This video walks through the pillars of our investment philosophy.
6. Is the Service Right for Your Stage of Life?
A 32-year-old W2 professional building their first financial plan has very different needs from a 58-year-old business owner approaching retirement with a complex tax picture. A good advisor either specializes in your situation or has clearly defined service tiers that match different life stages.
Watch out for: One-size-fits-all solutions, or advisors who push you into investment management when what you really need is a financial plan first.
At Financial Empowerment: Our services are built around where you actually are:
| Your Situation | Best Fit |
|---|---|
| Want professional investment management | Cornerstone |
| $600K+ invested, want planning included | Cornerstone |
| Under 45, W2 income, ready for a real plan | Quest: Pathfinder |
| Business owner, near retirement, complex picture | Quest: Legacy |
| Completed a plan, want ongoing support | Journey |
| Under $100K invested, need direction | Origin |
Not sure where you fit? That’s exactly what the free intro call is for.
7. Can You Verify Their Record?
Referrals and reviews are the most reliable signal that an advisor delivers on their promises. But you can also verify credentials and complaint history directly:
- FINRA BrokerCheck (brokercheck.finra.org) — search any broker or brokerage firm
- SEC Investment Adviser Search (adviserinfo.sec.gov) — search any RIA or IAR
- CFP Board (cfp.net/verify) — verify CFP certification status
- CFA Institute (cfainstitute.org) — verify CFA charterholder status
Questions to ask references:
- “Does the advisor proactively reach out to you, or only when you call?”
- “Do you understand what you’re invested in and why?”
- “Has your financial picture improved since working together?”
At Financial Empowerment: I am a Dave Ramsey SmartVestor Pro — a designation given only to advisors who meet Ramsey’s standards for fiduciary commitment, coaching approach, and transparency.
The Financial Advisor Checklist
Use this when evaluating any financial advisor — including me:
- ✅ Confirmed fiduciary in writing
- ✅ Fees fully disclosed — no hidden commissions
- ✅ Legitimate credentials that fit your needs
- ✅ Listens first — asks questions before recommending anything
- ✅ Simple investment philosophy — you understand what you own and why
- ✅ Right service for your stage — not one-size-fits-all
- ✅ Verifiable record — BrokerCheck, SEC lookup, references
📋 Free Download: SmartVestor Pro Interview Guide
Wondering how to interview a financial advisor? When you’re ready, use this one-page guide to ask the right questions on your first call — and compare your options side by side.
One More Thing
If you’re considering interviewing me, I’d love the chance. The first step is a free 30-minute call — no pitch, no pressure, no obligation. We’ll talk about your situation, your goals, and whether Financial Empowerment is the right fit. If I’m not, I’ll tell you and point you in the right direction.
📅 Schedule Your Free 30-Minute Call
Matt Gagnon, CFA® is the founder of Financial Empowerment, a fee-only financial planning and investment management firm in Plano, TX.
Financial Empowerment LLC is a Registered Investment Adviser in Texas and other jurisdictions where exempt. This guide is provided for educational purposes only and does not constitute personalized financial advice.
