Questions to Ask Your Financial Planner

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Questions to Ask Your Financial Planner

Once you have located a financial planner, you will want to make sure the planner is right for you. Here are several questions you should ask any financial planner before you hire him or her.

Questions to ask

• "What experience do you have?" Find out how long the planner has practiced and what areas he or she is an expert in. This will give you an indication of whether or not the planner’s expertise matches your goals.
• "What designations and licenses do you hold?" Find out whether the planner is registered with the state as an investment advisor or to sell securities or insurance. This lets you know whether you might need to work with other advisors in addition to your planner.
• "What services do you offer?" This varies greatly depending on the planner. Some planners offer advice but don’t sell products. Others may provide advice only in specific areas.
• "How do you charge and do you sell financial products for an outside company?" Your planner will charge by fee only, commission only, or both fees and commissions. This will let you know if the planner has other motivations for pointing you in a certain direction. Planners must act in their clients’ best interests when working with them. This is something they agree to do as part of their certification. They must also disclose conflicts of interest to their clients.
• "Describe your approach to financial planning." Make sure your planner’s approach isn’t either too cautious or aggressive for you.
• "Will you provide references?" It is always important to get the scoop from other clients.
• "What types of clients do you specialize in?" Does the planner prefer wealthier clients or does he or she work with all income levels?
• "What is your performance record?" A client likes to see measures of success.
• "How often are you in contact with your clients?" Does the planner use a hands-off approach, or is he or she available more frequently?
• "How often will you review a client’s portfolio?" Some clients like frequent review, while others are satisfied with less frequency.

Doing your research now will help you avoid misunderstandings and disappointment down the road. Your financial future may hinge on the advice of your financial planner; take the time to be sure you’re hiring the right one for you.