By Lindsay Goldwert
You can also ask if they receive referral fees from attorneys, accountants, insuranceprofessionals, mortgage brokers, or others and then allow them to explain how it would or wouldn’t impact their advice to you.
9. “Will you sign a fiduciary oath?”
Asking someone if they’re a fiduciary isn’t always enough. People can “ice skate” around that terminology and give fuzzy or unclear answers to that question. Instead, you may consider asking them to sign a fiduciary oath.
“If someone is fee-only, they shouldn’t have a problem signing a document stating how they get compensated,” Brewer says. “If someone is, for example, a broker dealer who works on commissions, they probably wouldn’t be allowed to sign it.”
10. “What kind of people do you normally work with?”
If the answer is “everyone,” that’s a red flag, said Brewer. If they brag about how they work with everyone from freelancers to hedge fund CEOs to athletes, it could mean that they’re really versatile–or they don’t have any kind of specialty at all and are just throwing spaghetti at the wall to gain new clients. “I’d recommend a financial planner who specializes or at least has experience in the life stage where you’re at,” she says.
11. “Can you repeat that so I can understand it?”
Personal finance can have a lot of jargon, yes. But that doesn’t mean that your adviser should be speaking over your head or creating an atmosphere where you feel like you’re asking a lot of “stupid questions.” “If you walk in and somebody is giving you a bunch of jargon and it’s going right over your head, or you feel like they’re condescending, then like you don’t have to put up with that,” says Brewer. (You can use this tool to get matched with a planner who meets your needs.)
12. “Are you a member of any fee-only financial associations?”
Check to see if they’re a member of a financial planning organization like NAPFA: The National Association of Personal Financial Advisors (NAPFA) or XY Planning Network , both of which are well-regarded, fee-only associations of planners. While this isn’t a necessity to hiring someone, it can show a dedication to their field.
13. “Do you have any limitations?”
This may seem like you’re luring them into a trap but really, you’re asking them if they would refer you to someone if there was an area of financial planning that’s outside of their expertise.
For example, you’d want an adviser who would admit to not being an expert at debt management or complicated estate planning. If they say, “I can do anything” or offer a vague response, such as “I’m sure we can figure it out,” that’s a red flag that the planner may just not want to admit that they’re not an expert at everything.
14. “How often should we speak to each other?”
This may depend on age, your goals, and the complexity of your financial situation and portfolio of assets. For example, if you’re 35 and need someone to create a plan for you and manage your investments, speaking to them twice a year may be enough. That said, if you need more hand-holding and want to be sure that you can get in touch with questions in between visits, that should be part of the service.
Your planner should get back to you in between set check-ins within a week so you’re never left hanging with a question.
15. “Can I speak to some of your former or current clients?”
Financial planners should be comfortable giving you references of clients whose money they have managed. If they aren’t, this could be a warning sign. ( You can use this tool to get matched with a planner who meets your needs. )
Questions to ask yourself after meeting with a potential adviser:
Is this person spending enough time to understand my financial goals?
Is this person pushing me to make decisions I don’t feel comfortable with?
Is this person speaking to me in a condescending tone?
Is this person giving me vague answers regarding payment structure?
Is this person giving off a “used car salesman” vibe?