Superbowl TV ads and NPR sponsors may talk about your hopes and dreams, but ultimately, salespeople focus almost exclusively on getting you to purchase their products.  When it comes to your finances, the situation is the same. Many financial services professionals are paid by your buying their particular insurance and investment products. Your financial situation is complex; a competent financial planner will analyze your current condition, make prudent recommendations and support you along the way.

Being armed with the right questions is vital in understanding your current / potential advisor’s motivation and whether or not they are going to work in your best interests. Any reputable advisor would be delighted to answer these type of questions for you and most will be impressed that you asked. Choose two or three, and next time you speak to your retirement / investment representative, try em out. You’ll be surprised.

Questions about Advisor’s company:

  1. Will you act as a fiduciary in our relationship?
  2. Will you or an associate of yours work with me?
  3. How many clients do you work with? (hint: more is not always better)

Questions about Advisor’s experience:

  1. What is your educational background (college degree, graduate degree)?
  2. What are your financial planning credentials? (CFP, ChFC, CPA, CFA, etc)
  3. How long have you been offering financial planning services? (years / months)

Questions about Advisor’s fees / compensation:

  1. How is your firm compensated and how is your compensation calculated?
  2. Do you earn commissions? If yes, what percent of your revenue comes from commissions?
  3. Are there financial incentives for you to recommend certain financial products?
  4. Is the cost of financial planning rolled into the price of investments? If yes, beware. 

Questions about financial planning process:

  1. Do you provide a comprehensive written analysis of my financial situation and recommendations?
  2. Do you offer assistance with the implementation of the recommendations?
  3. Do you offer continuous, on-going advice regarding my financial affairs, including advice on non-investment related financial issues?

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