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10 Questions for Your
Financial Advisor
Searching for a new financial advisor? How can you tell whether the advisor has the right experience and knowledge for your needs and goals. Below are 10 great questions to ask a financial advisor to determine whether they're right for you.
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What Experience Do You Have?
Ask the financial advisor about his or her philosophy, previous work experience and results. The advisor can also relate the answers to the company.
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What Are Your Qualifications?
A “financial advisor” is a broad term. What specifically qualifies them
to offer financial advice? Are recognized as a certified financial planner, a
certified public accountant/personal financial specialist, or a chartered
financial consultant? Do they have any other professional designations? Ask about continuing
education, and how they stay current in the financial planning field.
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What Services Do You Offer?
Find out what services the financial advisor offers, and if they match
your needs. Financial advisors generally cannot sell insurance or securities
products - such as mutual funds or stocks - without proper licenses. Nor can they
give investment advice, unless registered with state or federal authorities.
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What Is Your Approach to Financial Planning?
Most financial planners have a typical client profile and financial
situation they like to work with. Some planners offer comprehensive plans;
others work on a project basis or for an hourly rate.
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Will You Be the Only Person Working With Me?
Ask who will be your
main contact and who else might be working with you.
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How Do I Pay for Your Services?
Fee-only. All fees are paid by the client with no commissions
Commission. Payments are based on products sold to you
Salary. The planner is paid from commissions you pay the company
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How Much Do You Typically Charge?
Always ask for an estimate, based on your needs. The estimate could be
an hourly rate, flat fee or percentage of commissions.
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Could Anyone, Besides Me, Benefit From
Your Recommendations?
Ask about potential
conflicts of interests. Does the planner receive fees based on referrals or do
they participate in company incentive programs?
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Have You Ever Been Publicly Disciplined for Any Unlawful or Unethical Actions in Your Professional Career?
Check for disciplinary
actions for CFP practitioners on the CFP website. Be sure they are registered with the state or the U.S.
Securities & Exchange Commission. The planner must be able to provide you
with a disclosure form, Form ADV Part II, or the form’s state equivalent. |
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May I Have That in Writing?
Have the financial advisor give you a written agreement, detailing the services to be provided. Keep this document in your files.
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