Questions To Ask A Financial Advisor

If you are unfamiliar with financial planning, or even if you have some experience, the number of variables, product types, maximization strategies, and financial structures, can make the process overwhelming. Likewise, financial advisors have different specialties, product lines, or approaches.

If you have decided that you now need a financial advisor, it is important that as you shop around for the right trusted and highly rated professional, that you come armed with the right questions. This is to ensure that you find an advisor that will be the best match for you, your needs, and your goals. Remember that when it comes to your financial plan, you don’t really get a chance for a do-over.

This is why finding the right financial advisor is crucial. Below are questions you can use if you’re not sure what to ask a financial advisor.

What is your experience?

It is important to gauge the experience level of your prospective financial advisor. Financial products have changed dramatically over the past thirty years, especially in the last ten years.

A financial advisor with a great deal of experience and knowledge of current products is vital to build the best retirement program. Also the number of years in the business doesn’t necessarily equate to more experience.

How are you compensated?

Financial advisors can be compensated in a few different ways, including commission, fee-only, salary with bonus, and commission and fees. The way an advisor is compensated may reflect their priorities. Knowing how the advisor is compensated is also important in establishing the terms of your ongoing professional relationship.

No matter how your advisor is compensated, he or she should be able to offer clear, open, and honest explanations about their role, their affiliations, and their fees.

What kind of product lines do you work with?

Remember that certain advisors can only work with specific carriers and products lines. There are many different kinds of financial products that can be implemented to answer a wide swath of needs and objectives. Additionally, some advisors may have certain areas of planning that would be more relevant to you.

For instance if your spouse is about to receive social security and you are a few years away, you may want to seek a financial advisor that has experience with social security maximization strategies.

How are you different from other advisors?

There are financial advisors working today in all markets and geographical areas. How is your prospective financial advisor distinguished?

What gives their practice or approach an edge over others?

How often will you review my financial programs?

Advisors generally offer periodic progress reviews, often on an annual or biannual basis. Depending on your planning objectives and chosen products, this may be enough.

However—and again, depending on your situation—you may want more review frequency.

How many clients do you work with?

Ideally your personal finance advisor will have a balanced number of clients–a large number that indicates his or her efficacy and client satisfaction, but no so many they are unable to provide adequate personal attention.