Your financial situation is unlike anyone else’s. Everyone thinks about money differently, and no two financial advisors are exactly alike either. So how do you find the right fit when hiring a financial advisor?
First, it’s important to assess your values and goals. Most likely, your plans are about more than making money. You want a secure financial future, perhaps a fulfilling retirement, or the ability to travel as much as you’d like without worrying about your family’s future.
From there, you can start to ask questions that truly reflect your values. Will your financial advisor keep your priorities front and center, or do they have their own agenda? The following questions can help you get a handle on these and other concerns when interviewing financial advisors.
#1: What is your fee structure?
Gaining transparency on how your advisor is compensated can let you know if there is a conflict of interest in their recommendations to you. You need to know if an advisor sells products or gets commissions from their recommendations.
That’s why a “fee-only” advisor is a safe bet. This term tells you they don’t make money in any way aside from the regular client fee they charge. A fee-only financial advisor will not be financially motivated to subject you to sales pitches or biased recommendations on investments or insurance.
#2: What are your credentials/qualifications?
Experience, expertise, and background can tell you a lot about whether an advisor is qualified in the advice they are giving.
The most prominent and vital credential to look for is the CFP® professional designation. You might assume that all financial advisors are qualified for the job, but only a CERTIFIED FINANCIAL PLANNER™ professional has the CFP® license. They are bound by fiduciary duty only to make recommendations that are truly in the client’s best interest and held to a standard of excellence that gives you confidence in their decisions.
#3: What financial planning services do you provide?
Whether or not you seek out a financial advisor for one specific challenge, you still want to be sure you are getting comprehensive financial planning for the future. This comprehensive knowledge is another great reason to seek out a CFP® professional.
#4: What will our ongoing relationship look like?
Early on in your conversations with an advisor, your advisor should set the expectation for your relationship. It’s important that a financial plan is revised on an ongoing basis—not just set-and-forget. Ensure that your advisor plans to meet with you regularly to ensure your financial plan and investments are on track.
#5: Can you provide information about your investment philosophy?
Every advisor or advisory firm has a unique investment philosophy and should disclose this upfront. Be on the lookout for positive terms like “low-cost investing,” “diversity of investments,” and “tax efficiency.” Avoid advisors trying to sell you products or investments that rely on market timing or sound too good to be true.
#6: How does your team work together with me, my accountant, attorney, etc.?
Coordination with other professionals on your team, like an accountant or attorney, means more holistic and comprehensive planning. When everyone is on the same page, they focus on what is best for you, coordinating ideas, and putting them into action.
#8: How will we measure success?
Measuring the success of your financial plan is different than measuring investment performance. Gauging the success of your financial plan means reviewing and revisiting the original goals you set while working with your advisor. Have you made progress towards these goals? Your advisor should plan to review your accomplishments periodically.
#9: Do you specialize in a specific area or client type?
If you are in a complex situation, like going through divorce or loss of a spouse, this may be an important factor. Some advisors focus on a specific niche, while others have more general knowledge and varied clientele. Depending on your situation, if an advisor doesn’t specialize in an area of service you need, they may not be a good fit.
#10: Why do you like working with clients like me?
Why not work with an advisor who is passionate about working with you? If you do not fit as an advisor’s “ideal client,” they may not be able to provide the level of guidance you need—which often starts with getting to know you personally and all areas of your financial life.
Finding an advisor who is passionate about helping you starts with asking the right questions. Luckily, Team Hewins has financial advisors who specialize in many areas and are passionate about what they do.
At Team Hewins, our CFP® professionals are fee-only fiduciaries who are focused on your goals first and foremost. Contact our team to set up your free 15-minute introductory call.
Team Hewins, LLC (“Team Hewins”) is an SEC registered investment adviser; however, such registration does not imply a certain level of skill or training, and no inference to the contrary should be made. We provide this information with the understanding that we are not engaged in rendering legal, accounting, or tax services. We recommend that all investors seek out the services of competent professionals in any of the aforementioned areas.