Questions to Ask a Financial Advisor

At least one time in your working years, you have wondered if you need a professional financial advisor. Do you wonder what is a financial advisor? A financial advisor, also called a financial planner, lends guidance for any money management related goal that you aspire to achieve. Having a plan for retirement is the most common reason a financial adviser is sought out, but other goals such as wealth management or a child’s educational planning (i.e. 529 plan).

Depending upon your specific needs, choosing a financial advisor can be time consuming task. Advisors can choose a broad spectrum approach where they practice basic personal finance matters to estate planning, or they can specialize in particular fields such as insurance.

There are no set guidelines for hiring an advisor, but you should plan a scripted list of questions for interviewing the candidates that are available to you. We have listed 10 questions that should be used in your evaluation.

What services do you offer, and how can they benefit me?

A financial adviser may practice in retirement income planning only, or can advise on many different subject matters. Depending upon your needs as a potential client, this question dictates what services he/she can provide to you. Take notethat the advisor can give advice on any area they see fit, but can’t sell those particular services to you unless they are

licensed to do so.

What experience do you have?

Get an idea of the advisors experience by asking how long he/she has been in this field. Does the advisor work in a small private business, or does he/she work for a large firm? This can be important because the advisor may focus on managing your funds while forwarding other segments of your portfolio to other professionals such as accountants for tax planning purposes or attorneys for estate planning. The quantity of clients is also a big factor depending upon the amount of time you require to feel comfortable with the advisor.

Are you a certified financial planner?

Often an overlooked question, because anyone can offer you advice but does your advisor possess the accreditation necessary to call him/herself a Certified Financial Planner (CFP)?

Do you have any significant references or past ethics problems?

Anyone can create a brochure or device to sell their services, but old fashioned word of mouth advertising speaks for itself. Ask the advisor for clients who will vouch for his services (corporate or individual). Also, ask the advisor if any litigation or unethical cases are included in the advisors past. If so, ask if they have been resolved. Investigate for yourself if you require further verification.

What are your rates and how are you reimbursed?

Financial planners may have several different payment plans for their services. This could include a set percentage of you portfolio, a fee for each type of investment chosen, or a simple hourly rate for reviewing your files. Also ask if the

advisor is a paid affiliate of any of the products he/she sells to you. This will reveal any financial incentives from a

product in their portfolio versus a recommendation where the advisor receives nothing but your reimbursement. For example, if you enlist an advisor from Company XYZ who sold you their own mutual fund that under performed the stock market but somehowyou still paid 1% in expense fees. Most people would consider this unethical.

What documentation do you provide?

Ask for a written record of everything the financial planner provides to you in case of a dispute. If you feel you were overcharged for hourly fees or some other type of transaction based fee, what documentation do you possess to reinforce your claim? A printed document and paper trail will add support to any potential dispute should it arise.

Having a plan for retirement is an important financial consideration. Having a relationship with a financial advisor can be a valuable ingredient developing a financial plan. This relationship is more than about money, it’s about your retirement life.

About Cathy Severson

Cathy Severson helps baby boomers find more meaning and purpose in their lives and work. Get your copy of her complimentary e-book Guide to Retirement Activities a comprehensive look at work, volunteering and leisure based on an individuals’ personalities. Call for a complimentary 20-minute consultation to answer your most pressing concern. 928.775.4949 or email Cathy at

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