Understanding the credentials of a financial professional you’re considering is a good start, but there are other important considerations. 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 the purpose of the meeting is to find out more about the planner’s knowledge, experience, and investment philosophy.
At your meeting, ask for references and a copy of the financial advisor’s resume, including education and professional training, along with any professional designations earned. Call the accrediting organization later to check on whether the person is a member in good standing.
Basic questions you need to ask:
1. What is your experience?
2. What are your qualifications?
3. What services do you and your firm offer?
4. What is your approach to financial planning (e.g., attitude toward risk)?
5. Will you be the only person working with me?
6. How will I pay for your services (e.g., hourly fee, commissions, percentage of assets)?
7. How much do you typically charge (e.g., an estimate of possible costs)?
8. Can I have it in writing (e.g., a statement of services/fees)?
9. Could anyone besides me benefit from your recommendations (e.g., are there conflicts of interest)?
10. Have you ever been disciplined for any unlawful or unethical actions in your professional career?
The Securities and Exchange Commission (SEC) website has a link to a more detailed checklist you can use to guide you when interviewing financial planners (http://www.sec.gov/investor/brokers.html). Remember, your choice of a financial advisor will affect your financial future. Don’t be embarrassed to ask questions, and expect direct answers. And don’t hesitate to do background checks yourself. See For More Information.
A less tangible but important consideration is whether you are comfortable with a prospective financial planner. Does the person seem to have time for you, regardless of how much money you have to invest? Does he or she really listen to you and seem to respect your opinions? Does the person use financial jargon or explain investments to you in terms you can understand?
