I’ve seen first-hand how a healthy relationship between your money and your priorities can make a huge difference in your life. It’s important to find a good financial advisor that can help you manage your money and work towards your goals.
An outside perspective on your financial situation is invaluable. Ideally, you want to find someone who can serve as a sounding board during major life and financial events, as well as the smaller, though no less important, occasions.
In order to make sure you find the right person to fill this important role, I suggest asking them the following questions.
1. What do you love about your job?
This is a fantastic first question and you should listen very carefully to the answer too. Do they care about your whole financial picture?. What’s their story of how they got into the business?
You’ll see what a financial planner is all about by their response to this question.
2.What types of clients do you specialize in serving?
Some planners work with specific types of people like business owners that play golf, or 50-somethings thinking about retirement. Others might have doctors or lawyers as their main clientele. This means they have a comprehensive understanding of specific professions and can offer valuable advice. Choose a planner who works with clients in situations that are similar to your own. They’ll be better equipped to offer the type of guidance and advice that you need.
3. How many clients do you have?
On average, planners are able to serve between 100 – 150 clients fairly well. Anything more than that and clients might not get the time and guidance they deserve. Of course, it depends on the circumstances of each client, but you want to make sure the planner isn’t overbooked.
4. How will our relationship work?
Put another way: How much access will you have to the planner? Many clients attest to feeling under-serviced after the initial few meetings and once their plan has been set up.
In addition to your reviews, find out how accessible your planner will be should you require ad hoc advice, opinions, and assistance. Do they wait for you to contact them or do they proactively arrange to meet with you regularly?
5. How do you make money?
It’s important to understand if your planner receives any commissions or incentives that might influence their advice. Generally, with this model, they only get paid when they sell you something.
Fee-only planners are compensated directly by the client. Fees are transparent and the planner doesn’t receive any hidden compensation for the advice they give.
6. What services do you provide clients?
Most planners will assist you with investments and insurance needs, but will they help you with life? A holistic experience with a financial planner will teach your more about budgeting, buying a house, working towards your goals, and so much more.
7. What is your investment philosophy?
How do they select the specific investments in your account? Do they choose based on performance?
A good financial planner will tailor advice to you based on your needs, rather than on their own perspective of how to invest.
8. What’s your succession plan?
Since you’re dealing with a person whose job is helping others plan for retirement, you should hope that your financial planner has their own future mapped out as well. That person should understand that their own career won’t last forever and have a good plan in place.
The next two questions are not the be-all and end-all, but I think they are still important to ask.
9. What product providers are you associated with?
The best thing to do is to ask for a copy of their disclosure document which lists all the service providers they are contracted with and which products they are able to recommend. Consider any conflicts of interest that may affect them and the financial advice that they provide.
There is nothing wrong with them exclusively promoting a specific financial service provider, as they could still offer you great advice. However, I would be wary that if you perhaps needed a screwdriver and they can only sell a hammer, you might get sold a hammer
10.What professional credentials / education do you have?
There are lots of great planners out there that have no qualifications, but for me, studying further shows that they have passion and interest in what they are doing.
The highest designation is The Certified Financial Planner (CFP) from the Financial Planning Institute (FPI). It requires its members to complete coursework, a certification exam, and have sufficient experience before using the title. It also requires its practitioners to adhere to a set of ethical standards, including the fiduciary standard that requires them to put your interests ahead of theirs.
Navigating financial decisions requires more than sophisticated software; it’s about understanding how money impacts your life. At the end of the day, life can’t be boiled down to graphs and reports. A real, meaningful relationship with a financial planner requires thoughtfulness, good judgment, and experience to guide you through life’s many chapters.