Many people depend on financial advisors to handle some part of their financial affairs. Giving over that kind of responsibility can be scary, so it is important that advisor be both competent and working in your best interests.

TUTORIAL: Introduction To Banking And Saving

While it is difficult to know these things with absolute certainty, there are some obvious red flags that investors should watch for. If research into your advisor raises one of these flags for you, it may be time to move on — or at least to begin asking questions and digging deeper.

If you just want tax advice, a certified public accountant (CPA) may be the way to go. If you want investment advice, then a Chartered Financial Analyst (CFA) is probably better than a CPA. If you want an entire financial plan, then a CFA, certified financial planner (CFP) or chartered financial consultant (ChFC) may be best – or a person holding some combination of certifications. The most important point is that a certified or chartered advisor has been certified by a professional body and, therefore, has met that body’s standards. If your advisor hasn’t been certified or is certified only in an area unrelated to the specific service being provided to you, you should definitely find out why. (To learn more, read The Alphabet Soup Of Financial Certifications .)

2. A Lack of Time

If your financial advisor can’t find the time to have at least one thorough meeting a year, then you have a problem. In the world of financial advice, it really is all about you and what your goals and needs are. A lot can change over the course of a year, so your advisor needs to be updated in order to be effective. If your advisor can’t seem to find the time to discuss your specific situation, what other corners might he or she be cutting? (Learn more in Shopping For A Financial Advisor .)

3. Poor Communication Skills

If your advisor is struggling to explain financial strategies or concepts to you, it may be because he doesn’t actually understand himself. There are very few financial concepts that can’t be explained succinctly to a person with an average grasp of personal finance. Just because you do not understand does not mean your planner doesn’t either. But if your advisor is having trouble communicating, this is a problem and you might want to find someone who knows how to make you understand. (Check out Advice For Finding The Best Advisor .)