Q & A


1. Tell Me About Your Ideal Client

Any good financial advisor will have an area of expertise. You want someone who has expertise working with someone like you. If you’re about to retire, and they tell you they work with young families, maybe this isn’t the person for you. Find a financial advisor that has expertise & interest in working with clients similar to you.

2. How Long Have You Been Practicing As A Financial Advisor?

Personally, I wouldn’t hire a financial advisor that has less than four years experience, working as a financial advisor. You’re talking about your life savings. A potential advisor may have years of experience as a CPA, or in the mortgage or banking industry, but that doesn’t mean they have expertise as a financial advisor.

Many professional industries require internships or apprenticeships before you can be recognized as a professional, but as of yet the financial services industry does not have such a requirement, so to protect yourself, you need to set your own standard. (For an advisor to receive the CFP® designation, they now must have three years of practical experience. Congratulations to the CFP® board for raising the bar.)

Along with years of experience, you may wish to ask the advisor what subjects they are most interested in pursuing. Their answers should reflect subjects that are pertinent to their ideal client. If they say they work with retirees, but they are most interested in actively trading currencies, that should cause you concern. An advisor’s continuing education and professional interests should be aligned with the type of client they work with.

3. Ask A Potential Financial Advisor to Explain A Concept To You

What you are looking for here is, can you understand their explanation? If they speak over your head, or their answer makes no sense, then move on. You want to work with someone who can explain financial concepts to you in language you can understand.
Below are three concept oriented questions to consider asking:

4. How Are You Compensated?

There is no good or bad, perfect or imperfect, method or answer here.  Some advisors work only on a fee, others work on commission, some do both.

I suggest that you pursue a relationship with an advisor that is clear and where the mutual benefit for both of you is evident.

5.  Will you be the only person working with me?

The advisor may work with you directly or have others in the office assist.  Ask who will be your main contact and who will be working with you or be the point person.

 6. Can I have it in writing?

Ask the advisor to provide you with a written agreement that details the services that will be provided. Keep this document in your files for future reference.