TV ads 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 insurance and investment products. Your financial situation is complex; a competent financial advisor will analyze your current condition, make prudent recommendations and support you along the way.

Being armed with the right questions is vital in understanding an advisor’s motivation and whether or not they are going to work in your best interests. Any reputable advisor would be happy to answer these questions for you and most will be impressed that you asked.

Practice:

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

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)

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?

Financial Planning:

  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?