| If you are considering hiring a professional to help | | | | reasons. |
| you with your investments and personal financial | | | | 5. Who will be handling my account? |
| planning, you should come to the first meeting | | | | Some advisory firms assign teams of |
| prepared with questions that will help you to | | | | professionals and backup staff to work with |
| evaluate if the advisor is right for you. | | | | clients. Smaller firms usually have just one advisor |
| The questions below are intended to give you a | | | | working with each client. There can be benefits |
| good sense of the background, business | | | | and drawbacks to both models, and it is important |
| structure, advisory style, and qualifications of a | | | | that you understand the potential relationship so |
| prospective advisor or planner: | | | | you can make a decision that you feel will be best |
| 1. What are your professional qualifications and | | | | for you. |
| designations, including formal educational degrees? | | | | 6. How will you communicate with me and my |
| An advisor who has earned one or more | | | | other advisors? |
| professional designations has demonstrated a | | | | It is important that you receive frequent, clear, |
| commitment to education and professionalism, | | | | and accurate communications from your advisor, |
| and at least a reasonable proficiency in his or her | | | | and that they will work well with your other |
| field. Some common professional financial | | | | advisors (such as your accountant and attorney). |
| designations include: Certified Financial Planner | | | | You should also feel confident that your advisor |
| (CFP), Chartered Financial Analyst (CFA), Certified | | | | will be available for you promptly should you have |
| Public Accountant (CPA), and Chartered Financial | | | | a question, or want to meet to discuss something. |
| Consultant (ChFC). | | | | 7. What services do you provide? |
| Just as you might inquire about a potential | | | | Some advisors only offer asset management |
| employee's formal education, knowing where an | | | | services while others will offer a more complete |
| advisor went to school and what they studied can | | | | set of services that may include personal financial |
| help indicate their level of general intelligence, | | | | planning. You want to be sure you know exactly |
| knowledge, and ability to problem solve. | | | | what services you are going to get and how they |
| 2. How long have you been an advisor, how many | | | | will be delivered before you become a client. |
| clients do you have, and how much money do | | | | 8. What is your investment and financial planning |
| you manage? | | | | philosophy? |
| This information will help you evaluate an advisor's | | | | There are a variety of different investment |
| level of experience and relative success. You may | | | | philosophies and approaches to financial planning. It |
| want to avoid an advisor with too little | | | | is important that your advisor's way of managing |
| experience, or one who has too few or too | | | | money is consistent with your own. This is an |
| many clients. In general, successful advisors will | | | | essential area of said for a successful long-term |
| have more clients in assets under management | | | | relationship. |
| than less successful ones. | | | | 9. Do you take custody of client assets? |
| 3. Who are your ideal clients? | | | | Safety of your assets is imperative, so most |
| It can be helpful to understand the types of | | | | independent advisors use a third-party custodian |
| clients an advisor feels are a good fit for their | | | | firm, such as Charles Schwab, TD Waterhouse, |
| practice. You don't want to be an unusual client; it | | | | Vanguard, or Fidelity. Advisors who are registered |
| is better to fit well within an advisor's client base | | | | representatives will likely custody your assets at |
| so that you benefit from the advisor's experience | | | | the brokerage firm with which they are affiliated. |
| with others like you. | | | | Beware of advisors who don't use an outside |
| 4. How are you compensated? | | | | custodian. |
| Financial advisors are compensated in a variety of | | | | 10. What makes you different from others? |
| ways. It is important that you understand exactly | | | | A good advisor should be able to clearly explain to |
| how and advisor benefits financially from the | | | | you how working with them is uniquely different |
| advice he or she will be giving you. You may | | | | from working with someone else. This question |
| decide that you prefer one method of | | | | gives your advisor a chance to identify their |
| compensation over another, due to personal | | | | strengths, thus giving you the opportunity to |
| preference, potential conflicts of interest, or other | | | | make an assessment. |