(This is a guest post from Marty Higgins, a Certified Financial Planner who helps families sort through the financial
implications of losing a loved one. He also works with small business owners)
The world of personal finance is extremely complex. Just one look at the sheer number of investment options, retirement planning vehicles, types of life insurance, estate planning options and the tax implications of each
of these elements and you’ll notice it’s hard not to feel overwhelmed.
So what’s a business owner to do?
You could try to learn everything there is to know about each individual aspect of your personal financial situation, and constantly work to keep
up to date on those things, or you could seek help from a financial advisor so you can focus on growing your business.
Now, the problem is: Finding and choosing the right financial planner for you can be just as daunting. That’s why I created this guide and checklist
of things to consider before you hire your next financial planner.
9 Things to Consider Before You Hire Your First or Next Financial Planner…
1.What Is Your Financial Advisor’s Experience?
You need to know how long your prospective financial advisor has been in
practice and where he or she worked prior to the company that the advisor
is currently with.
2. What Are Your Financial Advisor’s Professional Qualifications?
The term “Financial Advisor” can have more than a single meaning. Ask any
prospective adviser what types of certifications or registrations they
have. These might include the CFP, RFP, CPA/PFS, ChFC, and CWM.
3. What Financial Planning Services Does Your Prospective Financial
You should ask the Financial Advisor what services they can offer you. The available services will depend on precisely which certifications and licenses that individual has secured. For example, in order to sell insurance, they may be required to have a license in your state.
4. What Are Your Prospective Financial Planner’s Philosophies or Views on
Financial advisers are individual people. While there will be some similarities in their educational backgrounds, as individuals they will bring different approaches to how they advise their clients. You can start out by asking the adviser what types of clients they like working with. Make sure it is individuals in a similar situation (e.g., at a similar stage in life, or in a comparable financial situation) as you.
5. Who Else From the Financial Advisor’s Company Will be Working With You?
Depending on the type of company the financial advisor works for, they may have other people on your account. If the adviser will receive assistance from others in the same office, then you might want to meet with those other individuals, especially if they are going to providing assistance in a key area, such as tax or insurance planning.
Your financial advisor might also use the services of professionals outside their office, such as attorneys. Then ask your financial advisor for the names and contact details of those individuals, and check their
6. Could Anyone Else Benefit From Your Financial Planner’s Advice?
There are situations where a financial advisor’s other business relationships or partnerships could affect their personal judgment with respect to your account, or otherwise act as a disincentive for the adviser to act in your best interest.
For example, if your adviser has a relationship with other companies whereby the advisor receives a financial benefit by selling their mutual funds or insurance policies, then you should be aware of this.
7. Can You Get the Scope of Your Relationship in Writing?
Your financial advisor should be willing to sign a written agreement that sets forth the most significant terms of your professional relationship.
At a minimum, the agreement should set forth exactly how the financial advisor will be compensated, whether they will act as a fiduciary with respect to your account, and whether there are any actual or potential conflicts of interest with their other professional activities.
8. Is Your Financial Planner Registered As An Investment Advisor?
Ask whether either the advisor individually, or his or her firm, is registered as an investment adviser (RIA). This registration can either be made at with the state or federal authorities. If the advisor is registered, then ask how they will inform you when they are acting as a sales agent of the firm, and when they will be acting as an investment
9. What are Potential Conflicts of Interest?
Regarding any brokerage account that you may open, ask the advisor to advise you of potential conflicts that they may have when recommending certain products. Also ask how they will disclose those conflicts of interest prior to you purchasing the product (including disclosing any payments or incentives that the adviser may receive).
The answers to these questions should be a guide to whether you should hire a particular financial planner – or run away fast. For even more information on how to choose a financial planner that meets your family’s
needs and goals – including more questions that you should be asking, I invite you to grab my Complete, FREE Consumer Awareness Guide at: http://www.chooseyourfinancialadvisor.com
During his 33+ years experience as a Certified Financial Planner, Family Wealth Management Expert Marty Higgins discovered that most business owners are risking their children’s chances of going to a good college,
their own chance at a secure retirement and their ability to provide a strong legacy as they have no criteria for choosing a financial advisor.
Now, grab his free special report at http://www.chooseyourfinancialadvisor.com & uncover the 16 questions that you should be asking.
photo credit: alancleaver