By Allen Giese, ChFC®, CLU®
Imagine you are meeting with a new financial advisor tomorrow who was recommended to you by a close friend. What questions should you ask him or her?
Hi, I’m Allen Giese, founding partner with Northstar Financial Planners in Plantation, Florida. The short answer is: Basically, you should feel free to ask anything you want, because, believe me, if they’re any good, they are going to ask you a ton of questions—and some you might think are even a bit personal. So you should feel free to ask just about anything you want to get to know them better.
There are a few basic questions everybody asks, and you probably should too. For example, I’d want to know right up front how an advisor is getting paid. For most people, the highest level—and the advisor who would move to the front row—would be that advisor who is paid fee-only. In other words, they have a full fiduciary obligation to do what is in your best interest over their own because they receive no compensation from anyone other than you. They receive zero commissions from product sales or anything other than direct fees paid by you.
My recommendation is, if they aren’t fee-only, thank them and walk away. You can easily do better. After that, I’d ask a question or two about what their experience is.
Five Questions to Ask
Let me give you five questions that give you a lot of insight into who you are choosing to work with. I have to tell you, if I heard these questions coming to me from a prospective client, I’d be blown away and would really want to work with them because they obviously are an above-average and insightful person.
So first question: How do you work with your clients to help them reach their financial goals? What you are looking for here is an advisor who can describe to you a clear, systematic approach for identifying and addressing your needs. You’re looking for a system that he or she follows with every client so no stone is left unturned.
Next question I’d ask is: Do you help clients address financial goals beyond investments? While many advisors provide only investment management, you may need assistance in the four advanced-planning areas of wealth enhancement, wealth transfer, wealth preservation, and charitable giving. Reality is, your investment plan is only one piece of the whole puzzle that defines you.
Here’s the next question I’d ask: Do you specialize in working with certain clients? The reason I’d want to know this is I want to know my financial advisor fully understands the specific challenges of the world I’m in. So, for example, if I have a special needs son or daughter, I want to know that my advisor deeply understands and has experience with what I’m going through.
Another great question would be: Do you work with specialists? An advisor needs to be able to access the full range of knowledge required to address your concerns. This may be through a team at his or her firm or through an outside network of professionals. To be most effective, the advisor needs access to top estate planning attorneys, CPAs, insurance professionals, and other professionals and thought leaders in your world.
And perhaps the best question you can ask is: Why did you become a financial advisor? The answer should reveal to you whether the advisor has a true passion for what he or she does. You be the judge.
So there you have it. If you’d like to try these out on us here at Northstar Financial Planners, give us a call, and we’ll set up an introductory meeting. Until then, I hope you have a wonderful day and a truly great investment experience, and thanks for watching!