It's an unfortunate fact that most people do more research before buying a car than they do before hiring a financial advisor.

Choosing a financial advisor can have a huge impact on your financial success, of course. But many people don't research as thoroughly as they should, just because they don't know what to look for.

When selecting an advisor, you should consider the person's background, experience, clientele and investment style. As a starting point, it's important to understand whether the advisor is a registered investment advisor (RIA) or a broker. RIAs are paid purely to give advice; they generally charge a fee based the total amount of assets they manage for you. Brokers are paid to sell investments; they earn commissions each time you buy a stock, bond or other investment, which can create conflicts of interest.

RIAs, who are regulated by the Securities and Exchange Commission (SEC) or their home state, are fiduciaries—they're legally required to act in your best interest. Brokers, regulated by the Financial Industry Regulatory Authority (FINRA), an industry self-regulatory organization, are held to a lesser standard. They must ensure that the investments they sell you are "suitable" for you, and there can be a lot of gray area there.

While many people consider advisors more trustworthy, it can make sense to work with a broker in some cases. If you just want to make transactions, and you want to have a major say in what's bought and sold, then a broker may make sense for you.

Beware of advisors who are registered as both RIAs and brokers. These advisors can switch back and forth between charging fees and commissions, resulting in an accumulation of unexpected charges. Here's how to check credentials, employment history and disciplinary history. For brokers go to

For registered investment advisors (RIAs), you'll want to find the ADV Part 2 disclosure form. Go to the SEC's Investment Adviser Search website, at .

Look up the advisor by firm name. After clicking the link for the firm, click the "SEC" link if the advisor is registered with the SEC, or if the advisor is registered with a state, click the link to that state. Click on "Part 2 Brochures." Google is another good background-check tool. Use it to see if there's negative feedback out there about a potential advisor.

When you interview an advisor, don't let him or her dominate the meeting with their standard pitch. Go in to the meeting with a list of questions, including:

What is your investment strategy? It's important that your advisor's strategy and philosophy match yours.

What is your typical client like? If the advisor hasn't worked with someone like you—a small-business owner, a widow, a very wealthy person, for example—then you probably don't want to be their first.

What is your advisor-to-client ratio? If the advisor serves more than 100 clients, he or she may be stretched too thin to properly take care of you.

How much experience do you have? Intelligent, committed advisors can be any age, but a little seasoning can be very reassuring. If an advisor has been through a few bear markets, she may do a better job of protecting your money when hard times hit.

What is your age/career stage? You don't want to be the guinea pig for a young, inexperienced advisor; better to find one who has been through a few bear markets. On the other hand, an advisor in his 60s may be focused more on retirement than on you.

Finally, understand that a long list of credentials doesn't necessarily make for a great advisor. More and more credentialing bodies are cropping up every day, peddling every conceivable sort of designation. These organizations get paid handsomely to confer their credentials, and the advisors get to put more impressive-looking acronyms on their business cards. In my view, real-word experience dealing with clients and the markets trumps any academic designation.