Before hiring a financial planner or an investment advisor, you should make sure to ask questions and review their background. Listed here are some important questions that you can ask.
- How are you paid for your services? What is your typical hourly rate, flat fee, or commission?
- What licenses do you hold? Are you registered with the Financial Industry Regulatory Authority (FINRA), SEC, or an individual state?
- What experience do you have, especially with people facing the same circumstances as me?
- Where did you go to school?
- What is your recent employment history?
- What products and services does your company offer? Will they fit my needs?
- Have you ever been disciplined by a government regulator for unethical or improper conduct?
- Have you ever been sued by a client not happy with the work you performed?
If you are meeting with a registered investment advisor, you will want to make sure that they can send you a copy of both parts of your Form ADV. This form is divided into 2 parts. The first part discloses specific information about a Registered Investment Advisor (RIA) that is important to regulators. This information will include name, number of employees, form of organization, nature of business, as well as any other necessary information. The second part acts as a disclosure document for clients of the business. It will include the information about the services provided and the fees charged.
You will want to make sure that you meet with a prospective advisor or planner face to face. This will ensure that they understand what you are looking for and goals you would like to achieve, while also allowing you to see real time what the planning process is. It will also allow you to ask any questions you may have to give you the peace of mind in your financial plans.
