Finding the Right Advisor

Finding the Right Advisor


Even entrepreneurs who hire book-keepers, sales reps and executives with ease, fumble when it comes to picking the right financial planner. Why? Because even the savviest entrepreneurs often don’t know the right questions to ask or what the job actually entails. Here are ten questions you should ask your prospective planner before you sign on the dotted line:

1. How much experience do you have?

How long have you been working as a financial planner? What kind of work have you done for clients like me?

2. What are your qualifications?

Look for a planner who has experience in insurance, tax planning, investments and estate and retirement planning.

3. What services do you offer?

Do you sell stocks, mutual funds and other financial products? Do you sell life insurance? Financial planners are generally barred from selling insurance or securities without the proper licenses and cannot give clients investment advice unless they are appropriately registered.

4. What is your approach to financial planning?

Will you make recommendations and then bring in other professionals to execute them or will you help me buy the stocks, bonds and life insurance policies I need? Does the planner’s investment approach match your own financial goals?

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

If your planner works with attorneys, accountants or life insurance agents to implement his plans, be sure to get a list of names and check their backgrounds.

6. How will I pay for your services?

Some planners charge an hourly fee or monthly retainer. Others charge a fee equivalent to a percentage of the client’s assets they have under management. Others charge you nothing but earn a commission from sales of life insurance, mutual funds and other products.

7. How much do you typically charge?

Can you estimate how much my costs will be? These costs should include the planner’s hourly rates, asset management fees and any commissions he is likely to receive from the products he sells you.

8. Could anyone besides me benefit from your recommendations?

If your planner receives commissions from product sales or referral fees from other companies or professionals who send him business, make sure that he fully discloses these potential conflicts of interest.

9. Have you ever been disciplined for any unlawful or unethical actions in your professional career? What government agencies and/or professional regulatory bodies are you governed by? Contact these organisations to conduct a thorough background check.

10. Can I have it in writing?

Ask the planner for a written agreement detailing the services to be provided. File it for future reference.

Most importantly, sit down and talk with your financial planner before you start to do business. Know who you are entrusting your money to: a large percentage of Bernie Madoff’s clients never met him.

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