Looking for appropriate professional credentials is a good starting point, but you'll also want to know about the person's experience. Narrow your list to several top candidates and set up an interview with each. Be sure to ask in advance if there will be a charge for this meeting. Prevent any misunderstandings by stating up front that you just want to find out more about the financial professional’s training and experience when you meet.
Ask every candidate the same basic set of questions so you'll have comparable information to evaluate each. Here are some core questions you should cover.
- Are you registered as an Investment Advisor Representative?
- Are you licensed to sell life and health insurance products?
- Are you licensed to sell securities, including variable products?
- Do you sell financial and insurance products for a specific company?
- How long have you been in practice?
- Can you provide references?
- How are you compensated? Most financial professionals are compensated in one of the following ways:
- Financial Planning Fee: Financial Planners charge either an hourly or fixed rate.
- Management Fees: Investment Advisor Representatives who sell managed investment accounts receive fees based on a percentage of assets under management.
- Commission-based sales. These financial professionals receive commissions on the financial products they sell, which may include insurance, securities and variable products, etc.
During your interview, ask for references and a copy of the financial professional’s resume, including education, professional training, business experience, and professional designations. You can contact the issuing organization to check if the individual is a member in good standing.
A less tangible but still significant consideration is the more subjective issue of how you relate with a prospective financial professional. Does the person seem to have time for you, regardless of your financial situation? Does he or she listen to you and seem to respect your opinions? Does the person use financial jargon, or explain investments and insurance to you in clear terms? Also research the financial professional’s firm. If you choose a firm because of the qualifications of a particular financial professional, keep in mind that you may need to deal with other professionals at the firm in the future.
