5 Interview Questions to Ask Your Financial Adviser

Brian Carrozzi December 11, 2013

It is no secret why many Americans believe that a potential retirement crisis is looming. With Americans cash-strapped more than ever, it is a daunting and even depressing task to plan for your financial future. Whether it’s planning to pay for your children’s college tuition or even saving for retirement, without a financial plan in place, you may end up being forced to work much longer than you had expected. Having a good financial adviser can help you create a plan that puts you and your family on the road to financial success.

Nevertheless, not all financial advisers are created equal. It is important that you do your research prior to hiring a financial adviser. Although there are tools out there like FinancialAdviser.com which pre-screens advisers, you should always do your own research and interview each adviser directly.

Here are several top questions to ask your financial adviser during the interview process:

1) Are you registered as an investment advisor?

If yes, the adviser has a fiduciary duty to you. This means that the adviser must put your needs first and make recommendations as to what is right for you versus what is right for them (hint: it involves commissions). If the adviser is registered, it is recommended that you ask to see a copy of the Form-ADV and Form-ADV part II.

2) How do you charge for your services?

This is very important as some advisers are strictly commission based which can lead to a conflict of interest. There are three main types of payment methods; fees based on hourly rates, fees based on a percentage of your portfolio value, and commissions per transaction.

Fee only financial advisers and planners versus commission based planners are less likely to steer you in a particular direction that benefits them.

3) What type of experience do you have?

Get to know your potential financial adviser. Remember, they are applying for the job to service you and you need to interview them carefully. Find out how long the financial adviser has been practicing, learn about their background, family situation, etc. Sometimes a financial adviser is in the exact same place in their life as you and can simply relate better to the financial decisions needing to be made in your life at that particular time. Find out if your potential adviser has additional credentials such as a Certified Financial Planner (CFP) or Certified Public Accountant (CPA).

4) What services does your financial adviser offer?

Some financial advisers are strictly focused on tax matters and estate planning. Others offer a variety of services and offer advice on a wide array of topics, including auto insurance coverage and health insurance plans. A “good” financial adviser will take a comprehensive, holistic approach to helping you manage your money, which includes saving money on things such as auto insurance, and using the extra savings to fund a child’s education, retirement, etc.

5) Can you provide at least three references?

This used to be a somewhat tedious task. However, nowadays getting references and seeing reviews can be as easy as doing a google search or typing in the advisers name on Yelp. Take 60 seconds to review your financial adviser on Yelp. Remember, no feedback on Yelp does not necessarily mean that the adviser is a poor choice.

Good luck on your financial adviser selection and congratulations for taking the step towards building a financial plan.

 

Find The Best Personal Finance

Read and compare the Best Personal Finance lenders. We review and rank the Top Personal Finance lenders.

See top 10