3 Red Flags to Watch for When Hiring a Financial Planner

Choosing the right financial planner can matter when it comes to your financial future, and not all advisors are created equal. While many professionals are committed to helping clients grow wealth and make smart money decisions, others may be more focused on earning commissions. They may prioritize commissions, push unnecessary products, or fail to communicate clearly. Knowing what to look for (and what to avoid) can make a major difference when choosing the right person to help guide your financial future.

Certain signs, subtle or not so subtle, can be warnings that a financial planner may not have your best interests in mind. They might present confusing options with seemingly little concern for your understanding of the processes involved. Or they may use high-pressure sales tactics that immediately make you uncomfortable. Whether you’re new to investing or considering replacing your current advisor, recognizing these red flags can help you avoid costly (and painful) mistakes. Here are some key warning signs to watch for when hiring a financial planner.

This post was updated on April 15, 2026.

Red Flag #1: Your financial advisor isn’t communicating

Chatting with your financial advisor should result in an active and engaging back-and-forth conversation, rather than you blindly doing whatever your advisor suggests without context or understanding. Through thorough discussions, your advisor can get to know you and better understand your financial goals. In this way, they can develop a clear idea of the investments that best support your interests.

Whether you’re extremely cautious (annuities, bonds, and CDs), aggressive (high-growth stocks and technology-focused ETFs), or somewhere in between, you should feel confident they have a firm grasp on your risk tolerance.  

If they are resistant to spending time getting to know your money and savings goals, this is a red flag. Move on to someone else.

Red Flag # 2: They’re aggressively pushing actively managed mutual funds 

Fees should be top of mind when dealing with a financial advisor. When working with an advisor who’s not a fiduciary, watch out for recommendations of high-fee mutual funds. At times, when you opt to pay for a particular pricey product, it benefits the advisor. For this reason, they may withhold information on markedly cheaper alternatives. 

Indeed, actively managed mutual funds tend to come with higher fees. And while the value of active management may be up for debate, the fact of the matter is that higher fees are often not worth the relatively small chance of beating the market. 

You should feel comfortable directly stating you’re fine with a market return and prefer a lower-fee index alternative (such as an S&P 500 index fund). If, however, they’re still pushing high-fee funds and trying to convince you that active management is always worth the extra cost, it may be time to shop for another advisor. They are likely misrepresenting the benefits in an attempt to sell you something that would net them more commission.

Active management can make sense for some investors, but you should be on alert if the expense ratios you’re paying are markedly above average (think around 1% or higher, with 2–3% being especially high).

Red Flag #3: They promise guaranteed returns

Any financial advisor who promises guaranteed returns should raise immediate concern. Markets fluctuate, and no legitimate professional can predict performance with certainty. If someone claims they can eliminate risk altogether, they’re being misleading.

A trustworthy advisor will be honest about the hard truth: in any investment strategy, there are both potential rewards and risks. They should emphasize long-term planning, diversification, and realistic expectations. If you hear them talking about “quick wins” or “sure things,” consider it a red flag. In fact, one of the most common principles in investing is that past performance is no guarantee of future results.

If an advisor is espousing guarantees that seem too good to be true, it’s a clear sign to proceed with caution. 

The bottom line

When finding an advisor, communication and chemistry are incredibly important, as are their motives and obligations to you. If you’re dealing with an advisor who’s not willing to listen and seems intent on pushing high-fee funds, it’s time to start looking elsewhere for a financial advisor you can trust.