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10 Questions to Ask a Wealth Advisor Before You Hire Them!

Searching for a new financial advisor? How can you tell whether the advisor has the right experience and knowledge to help your family achieve your financial goals? Below are the top 10 questions we would encourage you to ask any potential financial advisor, financial planner, or wealth manager before you hire them.

10 Questions for Your Financial Advisor - Experience
 

What experience do you have?

Ask about his or her philosophy, previous work experience and results. Ask the planner to briefly describe her work experience and how it relates to her current practice. Choose a financial planner who has a minimum of three years experience counseling individuals on their financial needs.

   
10 Questions for Your Financial Advisor - Qualifications
 

What are your qualifications?

A “financial planner” is a broadly used title and does not confirm any specific education or training. There are 18,000 people who call themselves a financial advisor, but only 6,000 who are certified. A lawyer goes to law school, a doctor went to medical school. The industry has many professional designations, but the Certified Financial Planner® (CFP®) is the highest mark for a financial planner. In the absence of a respected credential, ask what qualifies them to offer financial advice. Ask about continuing education, and how they stay current in the financial planning field.

   
10 Questions for Your Financial Advisor - Services
 

What services do you offer?

Ask what services are offered, and if they match your needs. Specifically, does the financial planner offer only investment guidance, financial planning, or both. Some investment advisors tailor a portfolio to each client’s specific situation, others simply provide a template investment plan that is applied to each account not taking tax efficiency into account. Some planners offer financial planning advice on all parts of a client’s life. Others may provide advice only in specific areas such as estate planning or on tax matters.

   
10 Questions for Your Financial Advisor - Planning Approach
 

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 proactive and comprehensive planning guidance; others work reactively on a project basis.  Many financial advisors state in their marketing materials they offer financial planning services, but the depth of a plan may be a generic report provided by software and may lack several pieces important to you. A truly comprehensive planning service will coordinate all disciplines of the financial planning process such as: cash flow and budgeting, retirement planning, goal setting for college savings and school selection, tax return reviews and minimization strategies, objective insurance needs analysis, estate plan discussions and design, and effective charitable strategies.

   
10 Questions for Your Financial Advisor - Main Contact
 

Will you be the only person working with me?

Ask who will be your main contact and who else might be working with you. Be sure you meet the person or team you will work with to ensure you are comfortable with them. Also ask how frequently your point of contact may change and what could trigger this. Some examples of contact changes may be employee turnover, growth of the firm they are employed by, or ideally, growth of your plan and the complexity of your needs.
     
10 Questions for Your Financial Advisor - Service
 

How do I pay for your services?

Nobody works for free, so it’s important to understand how the advisor is paid and consider any conflicts that may arise.
  • Fee-only. Advisors are paid a fee for service, with absolutely no commissions paid from the sale of financial products (e.g. partnerships, mutual funds, insurance products, etc.)
  • Commissions. Advisors are paid on commission based upon the sale of products to you. On the surface, these advisors may appear to work for “free”.
  • Fee-based. Not to be confused with fee-only, a fee-based advisor charges a fee and they collect commissions from product sales. Advisors compensated with fees and commissions are not always bad; It’s important to understand if they are double dipping or if any fees you pay are offset by commissions they may have received.
     
10 Questions for Your Financial Advisor - Pricing
 

How much do you typically charge?

Always ask for an estimate, based on your needs. The estimate could be an annual fee % rate, an hourly rate, flat fee or estimate of commissions. Most fee-only firms charge a % of assets under their management, so request to see their fee schedule or research their Form ADV on file with the SEC.
     
10 Questions for Your Financial Advisor - Recommendations
 

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?
     
10 Questions for Your Financial Advisor - Disclosures
 

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.
     
10 Questions for Your Financial Advisor - Agreement
 

May I have that in writing?

Have the planner give you a written agreement, detailing the services to be provided. Keep this document in your files.
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Field Guide to Choosing an Advisor
 

INVESTMENT
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Your investment philosophy should be grounded in academic research and financial science. Our team will build you an investment portfolio that aims to give you the highest probability of achieving your goals with the least amount of risk.

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Figuring out how to recreate your paycheck or developing a spending policy should not be an overwhelming exercise. Our team has the expertise to help with retirement portfolio, tax strategies, distribution planning, social security maximization strategies and more.

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We’ll have discovery conversations, gather and organize your data, then craft comprehensive plans to achieve your life and financial goals. As our ongoing commitment, we consistently monitor and tweak your plan to ensure you’re on track and surprises are minimized.

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