7 Questions to Ask A Potential Financial Advisor

Money and finance. As much as we'd like these concepts to be black and white, they are not. They are nuanced and emotional. Talking about money means opening up about our hopes and fears, and sharing our dreams and nightmares. Needless to say, choosing a financial advisor is deeply personal.?

Individual financial situations and aspirations vary greatly, so every financial plan and point of action has a creative element – and every financial advisor has their own, unique approach to partnering with you to achieve results. This is part of the reason why getting started with a financial advisor can feel confusing or overwhelming.?

Conflicting values and lack of time to find the right advisor ranked in the top five reasons people don’t work with financial advisors – alongside desire for independence, uncertainty about the value of advice, and lack of perceived need – according to this research published in June 2023 by Herbers & Company, a management consultancy firm. Interestingly, women were much more likely than men to see conflicting values as a barrier, with 25% of female respondents citing this as a concern.

That said, taking the time to get it right can be worth it; in fact, 95% of people who do have financial advisors believe that they are worth the money according to this survey by the National Association of Plan Advisors in March 2021.

So how do you tell if a financial advisor is the right partner for you? I recommend asking them these seven questions:

1. What is your philosophy as a financial advisor??
2. Are you a fiduciary advisor? And if yes, what does that mean??
3. What is your fee structure?
4. What information do you need to get started?
5. What if I only want one or two financial services, not all of them?
6. Will you require me to set a budget?
7. In your view, when is the right time to start working with a financial advisor??

These questions should help you get started down the path of finding a financial advisor who is a fit for your personal values and financial situation. And, if you’re interested, I’ve included my answers to those questions below.?

Rebecca’s Answers to 7 Questions to Ask a Potential Financial Advisor

Question 1: What is your philosophy as a financial advisor??

My answer: My primary objective is that my clients are in a better place financially and emotionally as a result of our work together. With that as the backdrop, I evaluate everything I do through the lens of who you are as a person, the life you desire, the values that drive you, and the goals you have for yourself and your family. These personal inputs are what inform my collaborative planning model centered around you, and guide my planning and recommendations.

Question 2: Are you a fiduciary advisor? And if yes, what does that mean??

My answer: Yes I am. A fiduciary advisor is a financial professional who is legally and ethically bound to act in the interests of their clients. Fiduciary advisors must prioritize the needs of the client above their own needs. As a former therapist, I put the highest ethical standard at the core of my practice. Now as a financial advisor and fiduciary, the topics are different, but my dedication to providing objectivity and deep consideration for what is in your best interest remains the same.

Question 3: What is your fee structure?

My answer: I believe in full transparency around fees and costs. I offer fee-based financial planning and wealth management, which is charged annually based on a percentage of assets under management. I also receive commissions on specific products such as life insurance. I will share details on fees and costs in our intro conversation, as they will depend on your specific needs.

Question 4: What information do you need to get started?

My answer: I keep the info download phase as straightforward as possible. The process includes:

1) Answering a one-page financial questionnaire?

2) Sharing your account statements?

3) Creating a profile on the client portal?

4) Completing a cash flow/budgeting worksheet.

Question 5: What if I only want one or two financial services, not all of them?

My answer: Depending on your life circumstances or your desired role in your financial plan, you may not need all of the financial services I offer. I am happy to discuss this on our introductory call.

Question 6: Will you require me to set a budget?

My answer: It's important to get a sense of your expenses and monthly/annual spending. Typically, rather than helping you set a budget, I will help you identify appropriate savings goals. From there we can back into your monthly spend in a way that gives flexibility and freedom while also knowing you are hitting your desired goals.

Question 7: In your view, when is the right time to start working with a financial advisor??

My answer: Having a financial advisor to provide coaching and guidance is helpful at any stage. Often the cost of working with an advisor is more than covered with the asset growth and accumulation you will experience. Having said that, to get the most value from this process, it is best to have minimal credit card debt and be in a place ready to begin saving money if you aren't doing so already.?