Now that you have a shortlist of advisors, the next step is to interview them. First, I compiled a list of sample questions to ask potential advisors from various sources. The CFP website has a list of ten questions to ask your planner. The Mackenzie funds website also features a list of interview questions that you can print out. Gail Bebee lists some sample questions in a chapter on hiring a financial advisor in her book, No Hype – The Straight Goods on Investing Your Money (review). And of course, Suze Orman has five questions for grilling a financial planner.

Initially, I worked from the list but later found that it is better to mention what you are looking for and develop a conversation from there. For instance, I’d start off the conversation by mentioning that I am a DIY investor, currently managing a portfolio of broad-market index funds and am looking for a fee-only planner to get additional help with taxes, retirement planning, portfolio review and insurance needs and ask if the planner is interested in me as a prospective client.

As someone looking for a fee-only planner, the discussion on fees was pretty straightforward — both planners said they would charge $100 per hour and take 10 to 15 hours for a comprehensive financial plan. If you are hiring a fee-based planner for managing your portfolio and offering other financial planning services, fees are an important point to bring up in an interview. It is absolutely essential that the advisor be forthright about fees and discloses all other compensation schemes (such as commissions) and reveal any incentive they may have to recommend financial products.

One great tip I got from a practicing financial advisor is to ask for a representative portfolio constructed for someone who has been a client for at least five years (without any personal information) and check if the prospective planner is a performance chaser or churns the account too often.

This article has 8 comments

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  3. It’s a little bit unfair to limit the choice to advisors with 5 years in the business. Some advisors, like myself, were DIY investors or had other jobs in the area of financial services prior to taking on their own clients. I also understand that the CFP certification is far more demanding and rigorous than it was years ago when many of the more experienced advisors took the exam.

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  6. I like Suzey Orman’s advice and books. Another valuable resource and approach is Susan Welch’s 10-10-10 approach which helps decision making in the following 10 minutes based on how that will impact goals in ten months and ten years

  7. Our firm also helps people find financial advisors on the Internet. One other piece of advice we give investors is to look for advisors who have experience helping other people in your same financial situation. Many advisors focus on a specific group such as retirees, business owners, or people just starting out. If you are a retiree and find an advisor who specializes here, they will have more experience with wills, estates, retirement income, health insurance, etc.

  8. Pingback: Finding a Financial Advisor: The Screening Process | Canadian Capitalist

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