Many consider engaging in the financial planning process, but never take that first step of exploring their options. It’s one of those very important, but not urgent issues that often get pushed to the back burner. It’s a lot of work to gather all the relevant documents and information needed to put together a comprehensive plan. Our schedules get busy. Not to mention, how do you decide who to interview and what you really want from the process? If you believe the investment commercials, it’s all so simple. Save a little and proceed immediately to endless walks on the beach and having a catch with the grandkids. Deep down, we know there’s far more work involved.
I was recently working to schedule a meeting with a prospective client and was blown away by the couples’ initial e-mail, which was the series of questions below. I commented in our first meeting that investors would be greatly served by asking these questions up front of anyone holding themselves out to be a financial advisor. It’s not a perfect list. It doesn’t cover every base or certain areas that may be unique to your situation, but if you’re entrusting someone to help you plan your future and invest that which you work so hard to earn, it’s a great place to start. While some questions may seem a little out of left field, they do a good job of helping someone get a sense of what the person or firm you’re talking with is all about.
There are no absolutes in this business, but if an advisor can’t answer any of the questions below to your liking quickly, in plain English, and without consulting legal counsel, I’d suggest you find someone who can. If you know someone considering financial advice, please feel free to forward this list through any of the “Share this Post” buttons below.
#1: Are you licensed as a stockbroker, insurance agent, or registered investment advisor?
#2: How are you compensated?
#3: What costs will I incur in addition to your compensation?
#4: What are your services?
#5: What is your investment methodology?
#6: Describe what your practice was like before, during, and after the 2008 credit crisis.
#7: Do all the advisors in your firm manage investments the same way as you?
#8: If something happens to you, what happens to me?
#9: Do you personally own the same investment and insurance products you’ll be recommending to me?
#10: What kind of people do you usually work with?
#11: How long have you been in this business?
#12: What is your ratio of support staff to professional staff?
#13: Do you conduct background checks of your staff?
#14: What is the advisor’s reputation, both in the field and in the local community?
#15: Do you have a clean regulatory record?
#16: Do I have to sign a contract?
#17: Why did you choose this work?
#18: Why should I choose you?
#19: What do you drive?
#20: Have you ever been fired?
There are lots of articles out there, all of varying degrees of merit, on this same topic. Here are a few other perspectives to help in your search.
We hope all of our readers, clients and their families have a peaceful and relaxing Thanksgiving holiday!