5 Questions to Ask a Financial Professional

Updated: November 8, 2022

Working with a financial professional can help you develop a solid plan to achieve your financial goals. Studies show that people working with a financial professional generally feel more confident in their financial future than those without a financial professional.¹

Because these relationships are so important, it’s essential that you take your time to find the right fit for your needs. The first meeting with any potential financial partner is your chance to ask questions that will help you understand not just where their expertise lies, but what they’ll be like to work with over the years.

Here are five important questions to ask to help you determine if a financial professional is a good long-term match:

1. What type of financial professional are you, and do you have any specialties?

 

Financial professionals come from a broad category of experts with different skills and capabilities. Some of the common designations you may encounter are:

• Certified Financial Planner (CFP^®): CFPs must have years of experience and pass a rigorous exam to achieve certification. By studying your income, taxes, debts, and investments, these financial professionals can give you a sense of your complete financial picture and help you work toward your financial goals.


• Registered Investment Advisor (RIA): RIAs can provide investment advice and manage your assets. As fiduciaries, RIAs are required to offer investment recommendations only with your best interest in mind. They typically charge a flat fee for their services. 


• Brokers: These professionals are paid on commission to buy and sell securities for you. They are not held to the fiduciary standard required of RIAs; however, they can offer suggestions and guidance based on your financial needs.
  
  

Besides explaining their professional designation, potential partners should clearly describe their areas of expertise and explain how they typically work with their clients. Be sure to share your financial priorities to ensure there is alignment with their experience. For instance, if you want help planning for retirement, you might look for someone who has experience with holistic planning that can help you see how all your assets and investments can work together.

2. What are your fees?

 

Qualified professionals will clearly explain what they charge for their services and how those expenses are calculated. For example, you’ll want to know if they earn their money via:

• A flat rate: The costs vary by project. For example, a financial professional may charge anywhere from $700 to $3,500 to put together a retirement plan.²


• Commissions: Paid to them by the financial institutions whose products they sell. It can be difficult to know the exact amount, but they should be up front so you know if their recommendations are unbiased.²


• An hourly rate: The average cost is $150 – $400 per hour depending on location and experience.²


• A retainer fee: This varies widely based on your net worth.
  
  
  

3. How often will we meet, and by what channels?

 

Open lines of communication with a financial professional can help keep you on track toward your goals. Regular communication can take different forms:

• In person: Meeting face-to-face at least once a year is a good practice. Annual meetings are the time for deep conversations about your goals, your progress, and any changes that need to be made to your financial plan.


• On the phone: Many financial professionals offer a quarterly phone call to keep you abreast of changes in the market and how they might affect you.


• Via email: You may receive follow-up emails after meetings to address specific questions you’ve raised. Some financial professionals also send frequent communications, such as newsletters that recap current market trends or provide tips about important tasks like year-end tax planning.
  
  
  

4. What would be your process for managing my portfolio?

 

Your financial professional should describe the process they use to review your financial information and determine whether any changes or updates are needed. For example, a financial professional who manages your investment portfolio might describe how often and when they rebalance, or buy or sell assets, to maintain the mix of investments that best meets your needs. Spouses should attend review meetings together so that everyone is on the same page.

Knowing that there’s an established process for these regular reviews can help you feel confident that your financial partner is keeping track of your savings appropriately.

5. Will I be meeting with other members of your team?

 

Ask if your financial professional will delegate tasks to other members of a team – and how that approach can help you. In many cases, a financial office has other experts on staff that the team can tap for assistance, such as an accountant who specializes in taxes or an attorney who works on trusts or estates. There also may be junior associates who can assist your primary financial professional, making sure your needs are met when there’s extra work to be done.

Questions like these can help you prepare for an open and honest conversation with any potential financial partner. By listening carefully to the answers you receive, you’ll be in a strong position to decide if you’ve found the right fit for the important work you’ll do together. Learn more about how to get the most out of your relationship with a financial professional.