Questions To Ask When Interviewing An Executive Financial Planner

CI Radnor Private Wealth - Aug 18, 2022
You work hard for your money, and having a financial plan in place helps your money work hard for you. Your financial matters are critically important and deeply personal, so choosing an…
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You work hard for your money, and having a financial plan in place helps your money work hard for you.  Your financial matters are critically important and deeply personal, so choosing an executive financial planner shouldn’t be based on whim.  When you’re looking for someone who’s going to help you navigate a complicated financial life to help you reach your goals, you want someone you can really trust.  Ideally this is the start of a long-term relationship, so you want it to be a positive experience from the get-go.  Here are 10 questions to ask up front to ensure a financial planner will be a good fit for you:

  • What are your accreditations/professional designations?

    Financial advice should be rooted in relevant expertise, and whoever is making recommendations on your behalf should have the qualifications to do so.  Three of the most recognized designations for financial services professionals are the Certified Financial Planner (CFP), Certified Public Accountant (CPA), and Chartered Financial Analyst (CFA).  Having any of these distinctions means that a person has passed a rigorous exam in their chosen field of study, in addition to meeting other requirements.  Once you establish a baseline level of expertise, move beyond that and get to know the person.

  • What is your investment philosophy?

    In order for there to be a good match with a financial planner, it’s imperative that you share a similar investment philosophy.  For example, do they focus more on an active or passive portfolio?  What is their viewpoint on alternative investments?  Whatever the case, their process and approach must resonate with you – otherwise that trust factor comes into play.  You’ll want someone who embraces consistency and long-term focus on goals, even (and especially) in the face of short-term market volatility.  Beware of anyone who makes recommendations before they take the time to get to know you, your goals, and priorities.

  • How are you compensated? Do you receive compensation based on fees or sales commissions?

    Fee structures can vary and can make a big difference on your bottom line over time.  Fee-only advisors focus on advice rather than sales, and are paid exclusively by the client.  Because fee-only advisors are not incentivized to sell you products to earn commissions, the fee-only model minimizes conflicts of interest.  Be sure to distinguish between “fee-based” and “fee-only”—the former collects sales commissions in addition to client fees, resulting in unavoidable bias.

  • Do you have an open investment architecture? Can you choose the best products to fit my investment goals?

    Open architecture means that an advisor can recommend both proprietary and third-party products and services to a client—whatever is in the client’s best interest.  By not being limited to in-house products and services that carry financial incentives, an advisor can focus on providing the most suitable investment advice that’s aligned with client objectives.

  • How do you stay updated on current industry developments?

    Staying current on news and events that could have client impact is vital to providing trustworthy guidance and support.  If a client’s situation changes with industry developments, it may demand a new or different solution.  Understanding how a financial planner keeps a pulse on market events can instill confidence that their informed big-picture purview will help your plan stay on course.

  • How do you evaluate a client’s current financial position?

    Any financial planner worth their salt is going to want to understand your full financial picture where you are now, before attempting to figure out where you’re going, or how you’re going to get there.  Besides identifying your financial goals up front, a planner will ask you for extensive quantitative and qualitative data that they will review and analyze in order to promote informed decision-making.

  • What questions do you ask to help me reach my financial goals?

    A good financial planner will have a slew of questions.  In addition to collecting detailed financial data, a planner will want to know everything about your goals—what they are, how you prioritize them, and where they appear on the time horizon.  They’ll ask about your risk tolerance, concerns, values, and vision for your future.  They will also want to know about your current lifestyle and if/how you anticipate that ever changing.  They’re listening to understand your emotions as much as your finances.

  • Are you a fiduciary?

    A true fiduciary prioritizes the client’s best interest over their own at all times.  If the answer to this question is “no,” the individual’s recommendations are only subject to the suitability test—which does not offer the same level of protection for investors.  Ideally you’d want any recommendation to reflect what’s best for you—not just what’s sufficient.

  • Do you offer comprehensive financial planning?

    Some professionals offer a limited scope of services.  When you are stretched for time and are facing an increasingly complicated financial situation, you may need help beyond the basics.  Finding an advisor who offers more comprehensive services such as tax planning and advice, estate and gift planning and advice, and tax preparation, for example, can be a major benefit.  Not only does this save you the effort of having to engage with multiple professionals to address all of these needs, but it also results in a more wholistic perspective when it comes to your wealth accumulation and management.

  • Can you provide me with some client references?

    Ask to talk to clients or families whose needs are similar to your own.  Make sure you actually speak with the references provided—you’ll want the lowdown on someone who’s going to be helping you make major financial decisions!  Hearing first-hand about another client’s experience should give you comfort and peace of mind about working with a particular planner.  If you hear something that gives you pause, then perhaps it’s not a good fit.

    Entrusting your financial life to someone else is an important decision, so let these questions guide your conversation.  And don’t be afraid to ask follow-up questions so that you feel heard and your needs are met.