How to Choose a Personal Financial Advisor

Turning to a personal financial advisor for help after you’ve tried in vain to set a family budget and it’s constantly failing is a wise decision. It’s priceless having the guidance of someone who has a strong understanding of money matters when you’re struggling with spending and saving and often find that you’re unable to make end’s meet.

However, hiring a personal financial planner is not something that can be taken lightly. It’s a critical decision because failing to select the right person may lead you to a worse financial position. Before you work with a personal financial planner that deals with your money and financial future use the following questions to find a candidate that best suits your needs.

Questions to Ask Personal Financial Advisor Candidates

1. How long have you been practicing as a financial planning advisor? Ask all candidates about their experience in personal finance field. Also, find out where they worked before the firm they’re presently with.

2. What are your qualifications? Financial Planning is a broad subject that can have more than one meaning. To help define what a financial advisor can do for you, ask them if they are certified and if so, what types of certifications they have. These might include CFP, RFP, CPA/PFS, ChFC, and CWM.

3. What services do you offer? These will be closely related to certifications and licenses they have. For example, to sell insurance, they need to have a license in your state.

4. What is your approach in financial planning? Ask them about their financial philosophy and how they advise clients. By knowing the type of clients they typically work with you’ll be able to decide whether their viewpoints, personality and approach may be a good match with your goals and style.

5. Who else will I be working with? Ask whether they have other people on your account. If this is the case, make sure you meet with them and ask questions to find whether you find a good match or not.

6. How much do you charge for your services? A good personal financial consultant should be able to give you a reliable estimate of how much they charge for their services.

7. How are you compensated? The way that you pay your personal financial advisor should always be clear and it’s important to get all agreements in writing.

8. Have you ever been disciplined for unethical or unlawful behavior? This harsh question can help you find and hire a reputable personal financial planner, someone with ethics and integrity. Alternatively, you can check with the various supervisory entities that govern the behavior of individuals in their industry.

9. Can I get this in writing? A written agreement that outline how they will be compensated and whether they will act as a fiduciary with your account is the standard practice. If you have to ask, then it may be a red flag.

10. What is the review process? Find out how you’re communicated with, how often you can expect a review and what their general policies and procedures are. Make sure you’re comfortable with them.

Overall, choosing the right personal financial advisor determines your financial future. For this reason, you want to take the time to thoroughly screen your potential candidates to make sure you’re comfortable with the decision and happy with your choice for the rest of your life.

How to Choose a Personal Financial Advisor was last modified: April 10th, 2014 by Paul Sarwana
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