How to Choose From the Top Financial Advisors in DC - Cope Corrales (2024)

Our nation’s capital has a high concentration of wealth, so it is no surprise to learn that there are many financial advisors in DC. In 2019, the median household income in Washington DC was $92,266 (DataUsa) compared with the national average of $69,560 (U.S. Census Bureau).

But financial planning and wealth management isn’t just for the highest income brackets. A 2020 Northwestern Mutual study found that 71% of all U.S. adults admit their financial planning needs improvement. Research suggests people who work with a financial advisor feel more comfortable about their finances and could have about 15% more money to spend in retirement.

Financial advisors in DC and the surrounding metro area stand ready to help people in a wide range of ages, income brackets, and financial situations. They can help with investment strategies, financial clarity, cash flow planning, estate planning, smart ways to repay student loans, and other financial aspirations.

But finding the right one takes some legwork. This article will review resources for finding the best financial advisors in DC and methods for sorting through them to find the right fit.

Where to find financial advisors in DC

The power of online connection makes finding a financial advisor easier than ever. The internet gives instant access to professionals all over the world with a simple search. Why limit the search to one geographic area? Well, many people are not comfortable taking intimate financial advice from someone they have never met personally. Personal connection and face-to-face interactions foster greater trust and better communication. Also, a person living and doing business in the DC metro area might benefit from a local advisor who knows the region’s economy, its financial players, and the local resources available.

Personal networking

Personal networking is the tried-and-true, albeit “old-school” way of finding a financial advisor. Co-workers, business associates, friends, and relatives probably share similar values, financial interests, and tax brackets. It makes sense to get recommendations. However, it is important to go beyond thumbs up or thumbs down. Ask specific questions. Why did they choose that advisor over other options? What is the advisor’s specialty? What is their risk tolerance?

Internet tools

Those online tools that search the world also will search the Washington area. Plus, several services and tools search for local financial planners. It’s important to note that the standards for each search tool are different. Here is a look at a few examples:

• Washingtonian: The magazine for the DC metro area publishes a regular list of local financial advisors. Users can filter the results according to location and specialty. To arrive at the names of the area’s 375 top financial advisers, the magazine asks hundreds of people who work locally in finance whom they would trust with their own money. To make the list less of a popularity contest, the magazine consults with industry experts and publications. Also, the list includes non-fiduciary financial advisers.
• Expertise: Expertise.com does proprietary research to identify the top service professionals in more than 200 industries in the country. It selected 172 Washington DC Financial Advisors based on more than 25 variables across five categories, including availability, qualifications, reputation, experience, and professionalism. They narrowed down the list to 37 whom they consider their “top picks.” This is just for the DC area, however, and the website has separate lists for nearby Alexandria, Arlington and Centreville, Va., and Silver Spring, Md.
• SmartAsset: This financial technology company also provides separate lists for Washington and nearby locations. It first identifies all firms registered with the Securities and Exchange Commission in a city. Then it narrows the list to only firms that offer financial planning services, serve primarily individual clients, and have no disclosures on their record. The firms were then ranked according to assets under management, individual client count, clients per advisor, age of firm, and fee structure.
• The Garrett Planning Network. With Garrett Planning Network’s tool, users can click on a state and find a list of financial advisors who specifically cater to the middle class. Garrett has a database with hundreds of independent, fee only financial planners providing advice without minimum account requirements or long-term commitments.

What to look for in a financial advisor

The National Association of Personal Financial Advisors (NAPFA) is one reliable authority on this subject. This American financial planning trade organization formed in 1983 to encourage consumers to use fee only financial advisors. Each advisor must sign and renew a Fiduciary Oath yearly and subscribe to the NAPFA Code of Ethics.

NAPFA has put together a seven-page guide for choosing a financial advisor. They provide detailed questions, but they also offer a diagnostic answer key that helps people evaluate their responses and make informed decisions.

The first rule of choosing a financial advisor: do not hire the first one you find. The sheer number of options may be overwhelming. That is because many distinct factors determine whether a financial advisor is a good match for you. Here are some other things to consider as you search:

Are they a fiduciary?

A fiduciary is ethically and legally bound to act in another person’s best interest. This obligation prevents concerns about conflict of interest and makes an advisor’s advice more reliable. NAPFA requires their advisors to be fiduciaries and asks the advisor to sign a fiduciary pledge. In fact, the seven-page guide recommends that consumers ask an advisor if he or she will sign the pledge.

What kind of services does the firm/advisor offer?

Not all financial planning firms or advisors will cover a given person’s needs. Even highly recommended certified financial planners are not a good fit if they do not cover the specific services a client needs. These are some of the typical services that people look for from a financial advisor:

• Risk management and insurance planning
• Education saving planning
• Tax planning
• Small business planning
• Legacy planning
• Debt management
• Emergency funds management
• Retirement planning
• Investment portfolio management
• Cash flow analysis
• Charitable giving strategies
• Estate planning

How will the advisor be paid and how much?

Different types of advisors levy fees differently. Fee only advisors charge based on their services, while fee-based advisors make money by charging a combination of fees and earning commissions on investments.

Commission based advisors do not charge their clients directly. They receive commissions for the products they sell their clients, such as insurance or mutual funds, from the product provider. These advisors can urge a product on a client that comes with a high commission, which is great for the advisor, but is not the best deal for the client.

Many experts recommend the use of a fee only financial planner or advisor. A fiduciary advisor will work only on a fee only or fee based status. That avoids the conflicts of interest that arise from commission based services.

Many fee only financial advisors charge a flat rate based on the services they offer. Some charge a percentage of all assets under management (AUM).

Financial advisors who are compensated based on commissions should be able to explain how they are paid and how much of their compensation comes from the sale of various commission-based investments or securities trading.

What are their credentials, background, and experience?

Financial advisors have to pass a series of certification tests and be registered to give investment advice. Ask your advisor about their tests and credentials. Here are some notable certifications to ask about:

• Certified Financial Planners (CFP): A certified financial planner will help clients with comprehensive financial planning to manage investments, retirement, insurance, and tax planning.
• Chartered Financial Advisors (CFA): Required to pass three levels of exams. They have expertise in portfolio management, investment analysis, financial reporting, and specific business concentrations. They mostly focus on investment management and asset allocation.
• Chartered Financial Consultants (ChFC): Handle financial planning for divorce and small business planning.

The most common credentials, CFP, ChFC, and CFA, require literacy in basic principles of financial planning, investing, wealth management services, risk management, retirement planning, and more.

Do they have any specialized certifications?

Financial planners or advisors can have many other advisory credentials that can help meet your specific financial needs. Here are some examples:

• Certified Public Accountants/Personal Financial Specialists (CPA/PFS): Help clients reduce taxes and organize investments. A PFS holds a CPA and offers financial planning services.
• Chartered Life Underwriter (CLU): Experts in life insurance, risk management, and estate planning.
• Certified Investment Management Analyst (CIMA): Generally, focus on investment consulting and work with both individuals and corporations.
• Financial Risk Manager (FRM): FRMs work with individual clients seeking risk management and investment advice.

This list only scratches the surface. Advisors can hold plenty of other certifications that make them a valuable resource. However, some certificates are mere eye candy. It pays to not only ask about certifications and credentials, but to check into them.

What is their financial strategy?

The best financial advisor is one whose strategy aligns with the client’s. Risk tolerance is one particular example of this. When it comes to planning investment management, for example, a client who is happy to roll the dice is not likely to be pleased with a risk-averse advisor. On the other hand, a cautious client might be unsettled by an advisor’s proposal for an aggressive investment portfolio.

This example shows why so many people want a local financial advisor with whom they can meet face to face.

Planning the future

If you are searching for one of the top wealth advisory firms in the D.C. metro area, you will find Cope Corrales on the list. Cope Corrales provides independent advisors, conflict-free proprietary investments, consulting services, and strategies for a wide range of financial needs.