Interviewing a Financial Planner

When finding your financial planner you'll want to do an extensive interview with them. Getting honest answers that fit the mold of a good financial consultant will be imperative to the selection process. Here are the questions you must ask, and a guide to the answers you should receive:

Where does your income come from? You want to determine if their income comes from the fees that they collect for their time, or from the commissions they receive from the products they sell you.

How do you charge? If they charge hourly it's probably your best bet. If they collect ongoing fees to manage their clients money, you're probably better off going somewhere else. An hourly rate may seem like a bad idea because it sounds expensive, but it's the best way to keep things honest between you and your advisor and avoid any conflict of interest.

What is the hourly rate? You'll find that the rates for financial advisers are all over the board. It's similar to legal or tax advice. You should not have to pay hundreds of dollars to get good results, but you want to be careful not to underpay when it comes to the person that is supposed to be helping you with your financial goals.

Do you have any other services? Be leery of any advisor that offers any other sort of services like legal or tax advice. These areas are expansive and require their own professional guidance. Steer away from any Jack-of-all-trades.

What are your qualifications? You'll want to make sure that your advisor has the right mix of experience and education so that you'll be confident in their recommendations. If you only consider planners with 5 or 10 years experience you might be overlooking competent advisers that would help you for a lower hourly fee.

Have you sold the following? If your planner has ever sold limited partnerships, futures, options, or commodities, you'll want to avoid them. These types of investments are not sound and that advisor may have questionable advice.

Can you provide references? You want to make sure that they can provide you with references and that these references are clients that have similar investment needs as you. If your advisor has only helped people with a considerably higher income than yours they might not be able to relate to your goals.

Will I be able to fly solo? You'll want to make sure that you'll be able to handle your own finances after your advisor gives you the strategy. If your planner is making it seem that you will need them perpetually then you'll want to avoid them. They should not only be a planner and advisor but also a coach. They should be coaching you on to making your own decisions and being autonomous.