How to Find the Best Financial Advisor in Santa Barbara

As a Certified Financial Planner, and a native Californian, I’m passionate about helping those in need of financial advice across the Golden State, including the residents of the beautiful city of Santa Barbara!

It can be challenging to sort through the various services, products, pricing, and claims the financial industry makes, to find the advisor that is right for you.

In this article, I’ll lay out qualifications, pricing, and other vetting criteria to help guide your search.

1. Fiduciary Standards Of Care

The first thing you need to know about a financial advisor is whether or not they’re a fiduciary. Fiduciaries are bound by law to put the best interests of their clients ahead of their own.

Fiduciary standards are the highest form of ethics in the advisory industry. But not all financial professionals must adhere to them. In the case of broker-dealers, accountability is only held to what is known as the “suitability standard.”

This less stringent standard allows for investments to be provided to a client on the basis of benefit alone. They don’t necessarily have to be in your best interest. For this reason it’s imperative that the advisor you’re working with is a fiduciary. And thankfully, there are a few designations that will help you spot them with ease.

Registered Investment Advisory

A Registered Investment Advisory (RIA) is held accountable to fiduciary standards. And they’re required by the SEC to adhere to the following duties:

The Duty to Seek Best Execution: RIAs must look for the best ways to maximize your account’s performance. They have to analyze the solutions they provide along multiple dimensions (ex: past performance and fees).

The Duty to Provide Advice and Monitoring: RIAs must regularly communicate with their clients regarding the performance of their accounts.

The Duty of Loyalty: RIAs need to fully disclose any conflicts of interest over the course of their working relationships with clients. Additionally, they’re obligated to provide a sufficient amount of information on any solutions they recommend.

The Duty to Provide Advice In The Client’s Best Interest: RIAs are required to take the time to dive into, and understand the financial objectives of their clients. On top of this, they must believe the solutions they provide are in alignment with such goals.

Certified Financial Planners™ (CFP®)

Another designation to keep an eye out for is that of a Certified Financial Planner™ (CFP®). This is the minimum requirement I would recommend in finding a financial advisor.

These professionals must meet rigorous training requirements and agree to serve with fiduciary standards of care. Their credentials include:

Extensive Education : In order to become a CFP®, an advisor must hold a bachelor’s degree (or higher), complete the rigorous financial planning coursework (usually takes 18 to 24 months), and pass the challenging CFP® Board exam.

Prolonged Professional Experience: A CFP® professional must also have extensive professional experience under their belt. This experience includes either 6,000 hours of professional work related to financial planning, or 4,000 hours within an apprenticeship position approved by the CFP® Board.

Commitment to Fiduciary Standards: Part of becoming a CFP® requires the signing of an Ethics Declaration. This declaration dictates that the advisor is willing to submit to the CFP® Board’s background check, and that they’re willing to serve their clients while maintaining fiduciary responsibilities.

2. Fee-Only Pricing Models

There’s a huge difference between advisors who are fee-based and ones who are fee-only. In fact, it’s a good idea to start associating “fee-based” with “commission-based.” That’s because fee-based advisors are able to sell you products they personally receive commissions on.

On the other side of the table, you have fee-only advisors. They earn no commissions, and instead charge a flat fee on your assets under management (AUM). Put another way, the only way a fee-only advisor makes more money is if you do too.

If a financial professional can sell you commission-based products, they have a direct incentive to potentially go against your best interests. One way to rule out these professionals is to make sure your advisor is part of the National Association of Personal Financial Advisors (NAPFA), which is a leading association of fee-only advisors. You can also conduct a search through the Fee-Only network.

3. Niche Specialization

Financial advisors can specialize in serving particular needs and client bases. As a result, their experience and professional network becomes more nuanced, and they’re able to navigate clients of a certain type more deftly.

Advisors have successfully niched in a variety of groups. These include, but are not limited to widows, divorcees, doctors, lawyers, military, and young professionals.

Depending on your situation, one firm may be more tailored to your specific situation than another. By working with an advisor who’s experienced in your area of need, you’re able to streamline a systemized approach in overcoming your problems, and accomplishing your goals.

4. Additional Vetting Questions To Ask Prospective Financial Advisors

When you’re searching for an advisor, you’ll want one who is a fiduciary, holds a CFP® designation or works with an RIA firm, and it may be beneficial for them to be niched in an area that serves clients like you.

Once you narrow down a list of advisors that meet the above criteria, you can interview them to find the best fit. Not sure what to ask? Following are 10 questions recommended by nerdwallet, (followed by my answers).

1. Are you a fiduciary?

Yes. We will always put the client first by selecting and creating the best portfolio for their specific needs. This matches our mission statement for every client- “Provide the highest expected return with the least amount of risk at a very low cost”. 

2. How do you get paid?

Either by a tiered management fee on the assets under management or by the hour, no commissions.

3. What are my all-in costs?

Your cost depends on the type of work we are doing with you. It will either be based on Assets Under Management (AUM) or the number of hours we work with you (or maybe both) and will be spelled out clearly before we begin working with you. There are no hidden costs, surprises, or commission based fees.

4. What are your qualifications?

I have over 25 years in Investment Management and Financial Planning. In addition to my years of experience, I am a licensed Certified Financial Planner (CFP®), a Qualified Plan Financial Consultant (QPFC®), and an Accredited Investment Fiduciary (AIF®)

5. How will our relationship work?

Very smoothly.  We are willing to work exactly how you, the client, wants to work with us….either meet in person – at our Westlake Village office, or a place closer to you if you prefer – or on a zoom call on a scheduled basis. Our goal is to manage your wealth and give you peace of mind.

6. What’s your investment philosophy?

I believe we are in the new frontier with academia…..we call it “Evidence Based Investment Philosophy”. Some people call it “Vanguard on steroids.”  Basically, “utilizing mathematical analysis to provide statistical significant outcomes of expected returns and risk in portfolio construction.”

7. What asset allocation will you use?

This is customized to the clients specific needs, risk tolerance, and goals. 

8. What investment benchmarks do you use?

Standard benchmarks for each asset class that are widely accepted by the investment community.

9. Who is your custodian?

We currently use TD Ameritrade and Charles Schwab. They plan to merge next year.

10. What tax hit do I face if I invest with you?

Every client is different and unique. We will always help our clients understand, improve, and lower their tax situation in a way that makes sense for their situation.

We are located near you in nearby Westlake Village

Hi, I’m Ted Fischer. At Fischer Investment Strategies we specialize in helping small business owners. And if you’re open to working with an advisor virtually, or beyond the Santa Barbara city limits, we’d love the chance to learn more about you. And our extensive experience allows us to quickly devise the solutions most commonly needed by our employer clients.

If you’re a small business owner in need of financial planning services, please don’t hesitate to reach out. You can call us directly at our Westlake office at (805) 418-7686, or our San Clemente office at (949) 433-7768. Feel free to also schedule a complimentary consultation at a time that works best for you.