| Take the time to interview several candidates. It may be tempting to simply choose the first advisor you hear about, but it’s best to meet with at least three financial advisors before you make a final decision.
When setting your appointment, go to the advisors’ offices instead of inviting them into your home. This allows you to examine their office and business environment.
Here are some questions you can ask the prospective advisor. For a more detailed, pdf version, click here.
Background
- What is your educational background?
- What are your financial planning credentials?
- How long have you been in this business?
- Have you ever been cited by a professional or regulatory governing body for disciplinary reasons?
Business practice
- How many clients do you work with?
- Will you work with me personally, or will you delegate to an associate?
- How often will I receive statements?
Compensation
- How is your firm compensated and how is compensation calculated?
- Do you have an agreement describing your compensation and services that will be provided in advance of the engagement?
- Do you receive ongoing income from any of the mutual funds that you recommend in the form of fees, trailing commissions or other continuing payouts?
- Are there financial incentives for you to recommend certain products?
Products and Services
- What products do you offer (e.g. mutual funds, stocks and bonds)?
- Do you provide a comprehensive written analysis of my financial situation and recommendations?
- Do you offer ongoing guidance with respect to my financial affairs, including advice on non-investment-related financial issues?
- Do you take custody of, or have access to, my assets?
- How many times a year will we meet?
At the end of your meeting, ask the advisor for a list of clients who are willing to provide references.
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