If you’ve decided to hire a financial planner, congratulations, you may have made the best decision you’ve ever made in your life. This also means that you could be in a relationship with this person for the rest of your life and they could have a huge impact on your future. This is why you should take your time before hiring one.
In order to find the best financial planner for you, you need to ask the right questions. Here are some of the things you should ask any financial planner before hiring them.
Are You a Fiduciary?
This is the first question that you need to ask any financial planner. Many people don’t know this, but a financial planner can sometimes get incentives for proposing certain products to you. These could offer them higher commissions, for instance. You have to go with someone that abides by the fiduciary standard if you want to avoid conflicts of interest.
Another thing you should check is if they’re in good standing with the CFP Board. You can also check FINRA’s broker check tool. Another resource you can check out is CFPBoard.net. This will allow you to check if they’ve been verified or disciplined by the CFP by inserting their name, where they practice, and their company.
What’s the Fee Structure?
The next thing you want to know is how they’re going to get paid. Fee structures can vary from planner to planner. Some will charge you per service and others will charge you by the hour or on a monthly basis. In other cases, they might charge you based on the number of assets they manage for you. This will usually be around 1%. It’s up to you to see what structure makes the most sense for you.
Also, know that they could be using a mix of these options, so that’s something that could make matters even more complicated. However, you shouldn’t let that stop you from comparing fees. Do the math and try to get an estimate of how much you can expect to pay per year.
How Much Guidance Can I Expect from You?
Don’t expect all firms to be heavily involved. Some will offer a bare minimum service, and this could be what you need. Others, like affiancefinancial.com, for instance, place more emphasis on educating their clients. It’s all a matter of how much hands-on advice you need from your advisor.
You also want to know how much access you will have to your advisor. Some will only give you advice if you pay while others may allow you to call them or contact them through email if you need any advice. These are all things you’ll have to discuss with them beforehand to make sure that both of you are on the same page.
These are all things that should be at the top of your mind when interviewing a financial planner. Do not take this step lightly, your financial future is at stake here. All these tips I got from Doug Constable.