Five Interview Questions to Ask a Financial Planner

Are you considering a search for a financial planner?

Different people seek financial planners for different reasons.  Given that individual circumstances differ; care should be taken to find a financial planner that fits your unique needs. For example, an individual with a cancer diagnosis may have a different set of financial goals, or priorities may have shifted.

During your search for a financial planner, you may suddenly be faced with the dilemma of what questions to ask and what to look for.

Stress no further!  Take it from a financial planner… here are five questions to ask a planner prior to hiring them.

  1. Are you a fiduciary? You may be asking yourself, what is a fiduciaryA fiduciary, in the financial planning world, is someone legally and ethically bound to act in your best interest.  Believe it or not, not all financial planners operate under the fiduciary standard.  Some planners may only operate under the suitability standard, meaning their advice must be suitable, but does not necessarily have to be in your best interest.  Which would you rather have?
  2. How are you paid? Financial planners may be compensated in a variety of ways, they may be fee-only, fee-based, or commissioned.  Some planners are compensated for advice offered, some for investment or insurance products sold, some a combination of both.  What’s the best option? An independent fee-only planner is generally a solid pick.  Fee-only planners may have fewer conflicts of interest as they are not incentivized to sell a certain investment or insurance product. Instead, fee-only planners are compensated for the advice offered.
  3. What’s my total cost and is there a minimum fee? Technically two questions; however, both are important.  When interviewing a financial planner, you should have a clear understanding of what your total cost will be if you become a client.  Often, there may be multiple factors that make up your total cost.  For example, a planner may charge a percentage to manage investment assets.  The underlying fund companies that make up the investment assets may also charge a fee.  If a planner sells an insurance product such as an annuity or life insurance policy, there may be a commission attached as well.  Know what your total cost looks like.  Important:  Some planners may charge a minimum fee for services rendered.  It’s a good idea to ask whether a minimum fee is charged, to avoid any surprises.
  4. What services and expertise do you offer? A financial planner is often like a general practitioner of finance.  They should have a broad understanding of a variety of different financial planning areas, including investments, insurance, tax planning, retirement planning, estate planning, etc.  A planner may have an area of expertise that they have decided to specialize in and focus on as well.  While navigating a cancer diagnosis, ask your financial planner if they have had experience working with other individuals that have cancer.  It’s near impossible to be an expert or specialist in all areas, and a financial planner may make a referral to other financial professionals to help you with the financial planning process and meet your needs.
  5. What do the alphabet soup of credentials mean after your planner’s name? It’s important to understand the education and experience that a planner brings to the table.  A plethora of financial designations exist and it’s not uncommon to see an alphabet soup of letters after a planner’s name.  If you are wondering what those letters mean, ask the planner!  Asking about the planner’s designations is a great way to get to know the planner, their background and interests.  Another option is to research the designations online.  You may search for a designation, while FINRA provides a profile of the designation essentials, qualification and educational requirements, verifications, complaints, and accreditations.  FINRA also offers BrokerCheck, a free tool that allows you to research the background and experience of financial brokers, advisors, and firms.

While on your journey to find the right financial planner, consider the above questions while you interview your candidates.  The above questions are not an exhaustive list; however, a solid starting point to identify important considerations.  You have worked hard for your finances and deserve a financial planner that cares about and respects you, listens to your needs, communicates clearly, and does not pressure you into making financial decisions.  Most importantly, your financial planner should be an advocate for you!


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Monica Bryant