If you’re working with a financial adviser to help you make sense of your money, you’re trusting that person to make the best decisions to improve your long-term financial health. In most cases, advisers can be a great asset to help you reach your goals. But in some situations, they may be doing more harm than good.

Not all advisers are created equal, and some financial professionals may hide certain things from their clients. These secrets can be dangerous, and could cost you a lot of money. Here are three big ones to watch for.

Symbols for secrecy

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1. They might be paid on commission

There are a few ways advisers make money. First, they might be paid a flat salary from the firm they work for. More commonly, though, they’ll either be fee-based or commission-based.

Fee-based financial advisers are either paid by the hour or receive a percentage of the assets they’re managing. For instance, if your adviser is charging a 1% annual fee and managing your retirement fund worth $100,000, that means you’re paying $1,000 per year in fees.

Commission-based advisers, though, earn money based on the types of investments they sell or accounts they open. That’s not necessarily bad, but it could result in them pushing certain investments or products to earn more money, even if they know these are not a good fit for your situation. In other words, these types of advisers may not have your best interests in mind, making it difficult to trust their guidance.

That’s not to say that all commission-based advisers are terrible. Many of them will work hard to manage your money the best they can, with advice that’s in your best interest. But before blindly trusting an adviser with your life savings, it’s important to ask a lot of questions. If something doesn’t sound quite right, trust your gut.

2. They may not be as qualified as you think

All advisers will try to persuade you that they are the very best in the business. But in reality, not everyone has the same skill levels. Many advisers will also tell you that they can manage every aspect of your finances, when sometimes it might be better to hire different people who specialize in various areas of the financial world.

For example, if you just need general advice about how to manage your money, working with a certified financial planner (CFP) is a good choice. Anyone in the business can call themselves a financial planner, but that doesn’t necessarily mean they are experts. CFPs, on the other hand, must meet rigorous training standards and pass an extensive exam to become certified. So before you work with anyone, ask about their qualifications to ensure they have the skills and training to handle your finances.

Also, think about the type of professional you need. Someone who provides general financial advice may not be the best choice if you need help managing a complex investment portfolio, for example. Although most advisers can provide some advice about most areas of finance, if you need in-depth help with a specific subject, it’s a good idea to find a specialist in that field.

3. You may not even need professional help to manage your finances

In some scenarios, hiring a financial adviser can be a smart choice. For example, if you’re getting older and need help making sure your retirement fund is on track, if you’ve recently inherited a lot of money, or if you simply don’t like thinking about your finances, working with a professional can ensure you’re making the best decisions. But not everyone needs an adviser to manage their cash, and if you’re shelling out hundreds or thousands of dollars per year for advice you don’t need, you’re simply wasting money.

It can be tough to tell whether you need an adviser or not. But in general, if your finances are straightforward, you don’t have any major concerns, and you don’t need personalized advice, you might be able to handle your finances on your own. If you don’t feel comfortable managing your money by yourself, it’s OK to ask for help. But don’t think you have to work with an adviser simply because you feel pressured to do so. With loads of (free) online advice at your fingertips, you might be able to find all the help you need without spending thousands of dollars for a professional.

Managing your money well is important if you want to reach your long-term financial goals, and sometimes that involves working with a financial adviser who can help you make the best decisions. But before you sign on the dotted line, make sure you’re working with the right person who has your best interests in mind — it can save you a lot of frustration and loads of cash.

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