When you are starting out with a new financial planner, it can be difficult to determine whether it's a right fit. You need to find a financial planner who is honest, trustworthy, and hardworking. You also need someone who has your best interest in mind and who specializes in the financial area where you have needs. How is it possible to determine all that from one visit? When interviewing financial planners (plan on interviewing several), here are some basic questions to ask which will help you get an idea if the potential financial planner is the right one.
1. What is your financial planning experience?
You want your financial planner to have some experience, and it's also good to know what other certifications they have. Ask what they have specialized in, what companies they have worked for, and what they like doing best. This will help you determine their area of expertise and if that aligns with your needs. If they say they love working with stocks and bonds, but you need help with your taxes, it may not be the best match.
2. Can you explain this to me?
Find a financial concept or problem you don't understand, and ask the potential financial planner to explain it. If things still seem fuzzy after the explanation, this could be a sign that your needs won't be met by this financial planner. Ideally, a financial planner should help you understand your finances better.
3. How are you paid?
Financial planners are paid a number of different ways, including fee-based and fee-only. It's important to understand the way they get paid, because it will often help you know how much you will end up paying. Some financial planners get paid on commissions, while others get paid a flat salary. Some financial planners require a fee from you when you cash out investments, and others require money when you put money in. The right financial planner will be upfront and honest about all fees and will help you understand if their payment style suits you.
These starter questions should help you on your way to finding the right financial planner. Be sure to be specific in your financial goals and needs in order to determine what financial planner will be best for you.
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