10 Questions To Ask a Financial Advisor

Questions to Ask a Financial Advisor

Financial advisors are trained to help people with personal finance and can be extremely helpful, particularly when you are dealing with suddenly managing larger sums of money or need to do tax planning to conserve as much money as possible for yourself or your heirs. Many people find that using a financial planner can help them when they don’t have the knowledge of personal finance to be comfortable investing and don’t have the time to research investments. Many people are experts in areas that made them money, but they don’t have the time to learn how to make wise investments or monitor them once they’ve made them.  For these reasons and several others, people seek the services of a financial advisor, but often don’t know how to choose one. Choosing a financial advisor is easier if you know the right questions to ask.   Get a FREE copy of our popular book “10 Strategies to Invest Smarter, Minimize Your Taxes & Protect Your Assets”  

What type of services do you provide?

Some people only need help with investing, while others need more than just investment management and want services that may include handling all financial affairs, including wills, insurance and income tax.  Before you start looking for your advisor, consider how much of your personal finance you want them to handle, and then ask this question to see if the advisor fits your needs.  

What are your credentials and how long have you been an advisor?

Several certifications and degrees are important. Is the advisor a CFP (Certified Financial Planner), RIA (Registered Investment Advisor), CPS (Certified Public Accountant) with a PFS (Personal Financial Assistant) degree? The longer the advisor has been doing his or her job, the more he or she has experienced the varying markets and the better he or she is equipped to know the right way to invest in these periods.  

What is the average and median size of your clients’ portfolio or net worth?

Some financial planners only work with high net worth individuals, if your personal finance isn’t large, you might be neglected. If you have a large portfolio or net worth, you want someone who is accustomed to working with larger portfolios.   Get a FREE copy of our popular book “10 Strategies to Invest Smarter, Minimize Your Taxes & Protect Your Assets”  

How do you charge for your services?

Some financial advisors don’t charge for their services, but make their money from commissions, either built into the financial products they use, such as loads on mutual fund or surrender charges on annuities. Some advisors get a percentage of your total assets on an annual basis, so their fee is based on the total assets they handle. Other financial advisors charge per hour and do not do any investing but simply offer advice and charge based on an hourly rate. The rate may be as high as $100 per hour.  While the fee only advisors may claim no conflict of interest, they may be too expensive for those with smaller portfolios and fewer assets and the investor still ends up paying the investment fees and commissions when following through with their advice.  You have to weigh the pros and cons of both, as well as be comfortable with the integrity of each advisor when choosing a financial advisor for your personal finance.