10 Questions To Ask If You Are Considering A Financial Professional

Many people who start working with a financial professional say they wish they’d done so sooner. While choosing to proactively manage your money is a wise move, choosing where — or with whom — to put your money shouldn’t be rushed.

Before beginning your search, you’ll want to think about the financial goals you want their help in reaching. Are you looking to accumulate wealth early in life? Or are you more concerned about retirement income planning? In retirement, you’ll need a smart distribution plan so you can have a steady retirement income. You’ll want to find a financial professional who’s experienced with retirement income planning, or you’ll have to plan to work with a different professional for your retirement needs.

With your goals in mind, the first step toward finding a financial professional is asking friends and family for recommendations and building a list of professionals to contact. You can also research financial professionals on your own with our list of financial resources.

As you consider which financial professional to work with, treat the process like you’re interviewing each of them for a job. Start with research about their background, years of experience, and their credentials and certifications. Then, it’s time for the interview. Here are some questions you might ask to see if your could-be financial professional shares your financial mindset, understands your goals and communicates in a way that matches your style.

1. HOW ARE YOU COMPENSATED?

Is it based on commissions, assets under management, fees, an annual retainer or some combination of these? What would be the cost to me as a client?

Why you should ask:
Every financial professional gets paid as a result of their work with you, so you’ll want to be aware of the payment method in advance. For example, some of them get paid in commissions, which non-experts don’t always notice on lists of costs. Others get paid as you work with them based on fees for advice. One method of compensation isn’t necessarily better than another, but you want to make sure you’re comfortable with how your financial professional is being paid.

2. WHAT IS YOUR BUSINESS MODEL?

Is it based on asset and wealth management, a transactional basis, full discretionary account management, or something else?

Why you should ask:
When a financial professional answers this question, you may hear some unfamiliar terms. That’s OK. Take notes on what they say. You can research the models and approaches they mention later. This will give you an idea of their investment philosophy, and then you can decide whether or not it aligns with the level of risk you’re comfortable with.

3. HOW DO YOU PREFER TO COMMUNICATE WITH YOUR CLIENTS?

How often will we communicate? Will I only communicate with you or others from your firm?

Why you should ask:
You want to know if a potential financial professional has the same communication style as you. Will they be available whenever you have questions? How often will this person proactively check in with you? Is it once a quarter or once a year? Will you be able to build a relationship with one person who understands your goals without having to be reminded? If these are things you want, make sure they’ll be available to you.

4. WHAT DO YOU EXPECT FROM YOUR CLIENTS?

Why you should ask:
Working toward your financial goals requires communication. It’s not something that can be put on autopilot, so you should be sure that you’ll be able to be involved with decisions when your financial professional needs your input.

5. WHAT MADE YOU DECIDE TO BECOME A FINANCIAL PROFESSIONAL?

Why you should ask:
A financial professional is someone you will likely build a long-term relationship with, so you’ll want to know what makes them tick.

6. WHAT TYPE OF INVESTMENT PRODUCTS DO YOU USE TO BUILD DIVERSIFIED PORTFOLIOS FOR YOUR CLIENTS?

Are there any product categories that you avoid in your practice?

Why you should ask:
It’s important to know where your money will be going. Having a would-be financial professional provide you with a list of their preferred investment products will give you a chance to research those products before choosing someone to work with.

7. HOW MUCH EMPHASIS DO YOU PUT ON RETIREMENT INCOME PLANNING?

How would you structure an income portfolio, including Social Security, for a retiree? How do you help your clients manage different types of risk like bear markets and longevity risk?

Why you should ask:
Retirement income planning is a different way to think about the money you’ll have to spend in retirement. Instead of just working to help you save a large sum, you want know that the financial professional also has a plan for how you’ll draw down your savings in retirement. Think of this as the monthly income you’ll have in retirement for covering your expenses.

8. WHAT IS YOUR MINIMUM ACCOUNT SIZE FOR NEW CLIENTS?

Why you should ask:
You’ll want to make sure you have enough assets to be worth the financial professional’s time and for them to feel like they can make a positive impact on your money. Certain professionals may offer tiered service based on account size, so you’ll want to know if you’ll get the attention and communication that you expect.

9. DO YOU HAVE A NETWORK OF OTHER PROFESSIONALS (SUCH AS CPAS, ATTORNEYS OR PRODUCT SPECIALISTS) THAT YOU HAVE ACCESS TO IF NEEDED FOR SPECIAL CIRCUMSTANCES?

Why you should ask:
There are many financial products out there, and things can get complex when they’re paired with individuals’ unique financial situations. For example, certain tax scenarios can require input from a CPA. You want to find out if your would-be financial professional knows their own limits and knows who to turn to in order to make informed decisions.

10. WHAT’S THE BIGGEST LESSON YOU LEARNED IN YOUR FIRST THREE YEARS OF BUSINESS?

How has that lesson impacted your practice over time?

Why you should ask:
Successful financial professionals are skilled at adapting to changing conditions. Asking how a financial professional applies things they learn can give you an idea of how they will proactively manage your money.

Remember, not every question is meant to conjure up a specific answer. The real goal is to find a person whom you feel you can trust to pursue your unique individual goals and with whom you can build a years-long working relationship.

Financial Professional Questionnaire

Download and print this helpful list and bring it with you as you meet prospective financial professionals so you can take notes.

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