7 Questions Your Financial Planner Should Ask You

Selecting the right financial planner can be tough. You want to find a qualified, trustworthy financial pro. But how do you know whether or not the person in front of you is the right fit for you? A Great Financial...

Selecting the right financial planner can be tough. You want to find a qualified, trustworthy financial pro. But how do you know whether or not the person in front of you is the right fit for you?

A Great Financial Planner Asks Great Questions

It’s important to ask questions to size up a potential planner during an initial consultation. It’s also important that the advisor ask you good questions during that first meeting, too. You want a thoughtful advisor who asks questions to look at your entire financial picture, not someone who prematurely jumps to conclusions.

Here are seven questions your financial planner should be asking you:

1. What Do You Hope to Accomplish Today?

If you’re looking for a financial planner, you may want a comprehensive financial plan — but you probably also have a few particular issues in mind you really want to focus on. Are you facing a layoff, a divorce, or thinking of retirement? Whatever your situation is, you want your advisor to address the specific reason you sought them out.

2. What Is Important About Money to You?

Money is a tool to help us create the lives we want. When your financial planner asks why money is important to you, it’s a way of getting at what you value most in your life.

In order to build an effective financial plan, you’ll want to put your money where it matters to you. That requires clarity about what you want most. Get specific about what you value — and make sure your financial planner cares about understanding that, too.

3. What Goals Do You Have for Your Finances and Your Life?

With better insight into what you value, it’s time to discuss goals. It’s not enough to discuss just  financial goals. You’ll want to incorporate your life goals into your financial plan to find a way to fund them.

Your advisor can help tailor your financial plan by knowing exactly what you want to accomplish with your money and in your life.

4. What Obstacles Do You Face?

When you’re trying to do something new, there will always be obstacles to change. Increase your chances of success by identifying possible obstacles with your planner. Once you have some ideas about what will stand in your way, you can work together with your financial planner to come up with creative solutions.

5. Do You Understand Your Cash Flow?

Now that you and your financial advisor have some idea of where you want to go, it’s important to get clear on where you are. Your advisor should ask you about your income, expenses, and your money management system (AKA: your budget).

There’s always room to improve if you struggle with knowing exactly where your money goes. Creating a good money management system will be the first step. It’s hard to implement specific advice otherwise.

6. How Would You Like to Be Involved in the Process?

Ultimately, the financial planning process is a relationship. Like any relationship, it’s best to be clear about expectations and preferences at the beginning. That’s why you want your advisor to ask you about how much you’d like to be involved in the financial planning process, as well as how and when you’d like to be contacted.

7. Do You Understand the Fees?

Financial advisors have different ways of getting paid. Some advisors are fee-only, meaning they only get paid through your dollars. This can come in the form of a flat planning fee, a retainer, or a percentage of assets under management. Other advisors receive commissions on financial products like investments and insurance. And some advisors are fee-based, meaning they get paid through a fixture of commissions and fees.

With so many different options, it can be confusing to figure out exactly how your financial planner gets paid. You want your financial advisor to care that you understand exactly about they are being compensated. Good financial advisors can get paid in different ways, but all good financial advisors are transparent about how they earn their living.