10 Questions You Should Ask Before Hiring a Financial Planner – Part 2
Roger Wohlner

Did you read last week’s post on 10 Questions You Should Ask Before Hiring a Financial Planner? I covered questions 1-5, including, “How do you communicate with your clients?”

Add the next five questions to your notes to take to your first meeting with a new financial planner, and you’ll be prepared to make the best decision for your financial interests.

6. Who will I be dealing with on an ongoing basis?Will the financial planner with whom you are meeting be the one to actually handle your account, or will you be passed off to some junior level planner? Obviously, you want to work with the “brains” behind the organization, although you should expect some contact with other folks in the office.

7. What professional credentials do you hold? The CFP® is the “gold standard” in the financial planning world. A CPA will likely be more proficient in taxes; some CPAs also hold the PFS designation which is similar to the CFP®. CFAs go through a rigorous investment curriculum which makes this is a difficult designation to attain. In short, there are many financial designations. Make sure you understand any that your planner holds and also understand what is involved in attaining and maintaining the credential.
8. Have you ever been disciplined by a regulatory or professional organization?Ask this question and get it verified. You can investigate brokers with FINRA and you can also check with the CFP Board of Standards at 800-487-1497. If you’re working with a registered investment advisor (RIA) or a broker at an investment company, you should ask to see both parts of the advisor’s Form ADV. Form ADV is the “uniform form used by investment advisers to register with both the Securities and Exchange Commission (SEC) and state securities authorities.” The form consists of two parts: Part 1 requires information about the investment adviser’s business, ownership, clients, employees, business practices, affiliations, and any disciplinary events of the adviser or its employees and is organized as a check-the-box, fill-in-the-blank format and is available to the public on the SEC’s Investment Adviser Public Disclosure (IAPD) website. Starting this year, Part 2 “requires investment advisers to prepare narrative brochures written in plain English that contain information such as the types of advisory services offered, the adviser’s fee schedule, disciplinary information, conflicts of interest, and the educational and business background of management and key advisory personnel of the adviser.” Ask your investment advisor or broker or financial planner if he or she is covered by Form ADV and if so, then ask to see Part 2. When filed, the brochures are available to the public on the IAPD website.
9. Do you have any conflicts of interest that would impact your ability to provide me with unbiased advice? This question dovetails quite nicely with the compensation issue and is so important, you should ask it twice. Besides hard dollar compensation conflicts (i.e. pressuring you to buy an annuity or whole life insurance policy because the advisor will earn a hefty commission), you want to find out if the advisor works for a product provider who precludes the advisor from offering a full range of investment products to you. This can often be the case with someone selling insurance and annuity products. You might be offered one product (for example, a whole life insurance product) when a second product (perhaps term life insurance) would be far less expensive and overall a better choice for your financial life. Even on the investment side, you should ask if the planner receives any form of compensation based upon the investments you might use to implement his recommendations. These are critical questions and you must make sure you understand them.
10. What can we expect in terms of a work product in return for what we are paying you? If you agree to move forward with a financial plan or ongoing advice, how will the advisor’s thoughts and findings be communicated to you and in what format? Will you receive a written report? Will you get it via email? You should understand this so both you and your advisor are working with the same set of expectations.

A good financial advisor can provide objective, professional advice. Before hiring one be sure he or she fits your needs and you have a level of comfort and trust with this person. It’s your money. So be sure to ask the right questions and don’t allow yourself to be satisfied with half-baked answers.


Roger Wohlner, CFP® is a fee-only financial advisor at Asset Strategy Consultants. Roger provides advice to individual clients, retirement plan sponsors and participants, foundations, and endowments.

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