Sep 2, 2021
Nearly sixty percent of Americans “want financial advice…”1 and it makes sense–with market volatility, inflation, the rising cost of education, and a myriad of other changing conditions, people are eager to create strategies that will endure. Now more than ever, people are hiring financial advisors to help them on their financial journeys and even more people are interested in figuring out how to find the one that works for them. Finding an advisor best suited to you can enable you to successfully achieve your financial goals. Like any form of service, you are in the driver's seat of what is best for you, so taking time to really get to know a potential advisor who might support you over the course of your life is important.
The process should take some time; it’s a weighty decision and worth being picky to find the right “fit”. When starting to interview potential advisors you might work with, it helps to have a set of questions and expectations ahead of time.
Treat your conversation with a prospective advisor as an interview. You’re seeking an expert to work for you and provide a service. If you approach it this way, you can ask the right questions to help you determine who best fits your financial needs and values.
To help you prepare and make the process easier, here are five questions to ask in your initial meeting(s) that will help you learn more about them and how they will work with you:
1. “What are your qualifications?”
There are many types of financial advisors out there, so you will want to understand how they became one. You may be able to find some of this information on their website, or you can simply discuss it in your first meeting. You can learn more about types of advisors here.
This information in their background will also help you to learn more about what kind of personalization the advisor uses to build financial plans versus using one size fits all approaches. This will help ensure the advisor will support you achieving your unique goals.
2. “What kind of services do you offer, and what do you charge?”
Even though many advisors carry the same title, they provide different services or products and get compensated in various ways. This can be confusing when you're looking to work with an advisor, so it’s crucial to understand how the financial advisor is compensated. The advisor should be able to clearly communicate how they charge for their services. There should be no secrets or surprises—you want to work with a financial advisor who provides complete transparency around their fee model and how they’re paid for their services and at what cadence.
3. “Are you a fiduciary?”
A fiduciary is someone who will put your interests ahead of their own. This is extremely important because there are many situations where the financial advisor’s interests could conflict with your own. If they’re a fiduciary, they have an obligation to disclose conflicts of interest and must continue putting your interests first. While this may sound like common sense, not all financial professionals have a fiduciary obligation.
4. “What type of clients do you typically work with?”
This question will give you insight into their ideal client type and you can decide if you match that profile. If you align with each other, ask them what their experiences are working with people like you and what sort of life decisions they help their clients through.
5. “How is your team structured?”
If there will be more than one advisor working with you, you need to find out how they will be interacting with you, and you will need to decide if that works for you and your goals.
If the advisor checks all your boxes and decides to move forward, you should expect to be treated like a top-notch client. They should get back to you in a timely manner, answer your questions in a way that you understand, and constantly help you protect or make progress on your financial life. It’s the advisor’s job to make sure you’re prepared with the best approach to achieve your financial goals.
On the flip side, if you’ve been working with an advisor and feel that you were sold promises or services that are being broken, it’s a good practice to move on quickly by finding someone new who will give you the type of service you deserve.
Finally, besides having a solid set of questions to ask at your first meeting, it’s equally important to come prepared with your own answers. Take time before the meeting to gather all your financial documents, know your current financial state, and loosely define your financial goals.
1 “Nearly 3 in 5 Americans (59%) want financial advice but are not sure where to get it, according to intelliflo survey,” PR Newswire, March 2022, https://www.prnewswire.com/news-releases/nearly-3-in-5-americans-59-want-financial-advice-but-are-not-sure-where-to-get-it-according-to-intelliflo-survey-301494402.html.
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