3. Makes claims that are too good to be true

Knowing the uncertainty of the business environment, an advisor with a reputation to uphold cannot guarantee or assure unreasonable results without the risk of losing the value of his word. If there really was such low risk and high margin options available, we may not be the first to know about it. There is no shortage of tricksters trying to con people out of their money. Drawn into a complicated and convoluted explanation or business plan, your financial advisor himself may be hoodwinked.

When an investor is faced with such grand claims, to err on the side of caution and conservatism may be safer. An advisor who gets carried away by charlatans or his own predictions is probably not the right person to advise you on what you should do with your own money.

4. Fails to ask about your financial situation

A good advisor will gather data on all aspects of your financial life. He or she would want to customize your investment plan based on your personal risk profile, duration of goals, and the types of returns you are expecting. The one size fits all attitude could be a sign that the advisor is not competent in understanding and planning for individual requirements.