There's a good reason why people use a financial advisor -- it can be incredibly time consuming to budget, invest and save money yourself. But, just like in any profession, not all advisors are created equal. If you are dealing with a less-than-qualified financial advisor, it could cost you a lot of money.

Here are a few ways to know if you're getting the best financial advice and if it's time to find a new advisor.



1. Your financial advisor should have a CFP designation

While there are good advisors who don't go through the rigorous Certified Financial Planning course, it's always better if your advisor has the CFP letters next to his or her name.

The course teaches people everything they need to know about being a financial professional and it's taught around the world. If the person has taken the course, then you know you're getting a certain standard of care.



2. Your financial advisor should be in contact with you

Part of a financial advisor's job is to be in contact when times get tough. If, for example, your financial advisor went missing during the recession and was not in contact to reassure you about your portfolio, you may have a problem.

At a minimum, you should be talking to your advisor once a year, but when the economy acts up, you should receive at least a letter or email explaining what's going on and how this impacts you.

3. Your financial advisor should not offer bad investment advice

It's hard to blame investment professionals for losing money during a recession -- everyone's portfolio is bound to suffer during tough economic times. But sometimes, an advisor can make imprudent recommendations that might give you pause. Do your homework so that you can understand the benefits or consequences of recommendations made by your financial advisor and trust your gut if you feel you're not getting the best financial advice.

Page 1 of 2 -- Check out two more helpful ways to know if you're in need of a new financial advisor on page 2.
4. Your financial advisor's fees should be clear
In today's low return environment it's more important than ever to make sure you know how much you're paying your advisor.

Many are now working on a fee-for-service basis, which makes it easier to track those costs, but the majority of advisors still work on complicated commission structures. Some get paid by a mutual fund company for investing your money, while others take a percentage of the assets they invest.

Don't be afraid to ask questions. Ask your financial advisor to explain exactly how they're paid. If they can't or they're hesitant to offer up this information, then find someone new.

5. Your portfolio shouldn't always perform poorly
This point is related to bad investing advice, but it's more about the overall portfolio. If you're consistently seeing negative returns, even when the market is climbing, it may be time to jump ship.

Your financial advisor should be helping you make money, not lose it. Find out why returns are so low and if there's no good reason, then look elsewhere for sound financial advice.

The worst thing you can do is hang on to a financial advisor for too long. If you've got a bad feeling, find someone else. Don't forget: It's your money that's at stake.

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