• Sat. Apr 20th, 2024

Interview questions to ask before choosing a financial planner

By David Wentz

David Wentz of Tax Favored Benefits, Inc.

When engaging with a financial planner, it’s important to ask thoughtful questions to ensure that you receive the best advice and make informed decisions about your finances. Here are some key questions to consider:

Qualifications and Experience:

  • What are your qualifications and certifications? (Look for credentials like CFP – Certified Financial Planner, CPA – Certified Public Accountant, etc.)
  • How many years of experience do you have as a financial planner?
  • Have you worked with clients in similar financial situations to mine?

Fees and Compensation:

  • How do you charge for your services? (Hourly, flat fee, commission, or a combination?)
  • Are there any additional fees or costs I should be aware of?
  • Are you fiduciary? (Fiduciaries are obligated to act in your best interest, while non-fiduciaries might have conflicts of interest.)

Services and Specialties:

  • What specific financial planning services do you offer?
  • Do you specialize in certain areas (retirement planning, investment management, tax planning, estate planning, etc.)?
  • How do you tailor your advice to individual client needs?

Investment Approach:

  • How do you develop investment strategies for your clients?
  • What is your investment philosophy? (Active management, passive/index investing, etc.)
  • How do you manage risk and diversification in investment portfolios?

Client Communication and Availability:

  • How often can I expect to hear from you? (Regular updates, reviews, etc.)
  • How can I contact you if I have questions or concerns?
  • Can you explain how you keep clients informed about changes in the financial landscape?

Client References and Reviews:

  • Can you provide references from current or past clients?
  • Do you have any online reviews or testimonials that I can read?

Financial Planning Process:

  • Can you outline the steps of your financial planning process?
  • How do you gather information about my financial situation and goals?
  • How do you create a financial plan that aligns with my objectives?

Approach to Risk Tolerance:

  • How do you assess my risk tolerance before creating an investment strategy?
  • How do you balance risk and reward in the investments you recommend?

Performance Measurement:

  • How do you measure the success of your financial planning strategies?
  • What benchmarks or metrics do you use to evaluate the performance of my investments?

Regulatory Compliance:

  • Are you registered with any regulatory bodies or associations? (SEC, FINRA, CFP Board, etc.)
  • Have you ever had any disciplinary actions or complaints against you?

Client Confidentiality:

  • How do you handle client confidentiality and data security?

Remember that the relationship between you and your financial planner should be built on trust, open communication, and a clear understanding of your financial goals and needs. Asking these questions can help you assess whether a particular financial planner is the right fit for your situation.

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