How To: Interview a Financial Planner

NEW YORK, August 25, 2020 (Newswire.com) - ​​​​​​​​​​Hiring a financial planner can make a significant difference in a person’s life by improving their financial situation, as well as reducing the stress associated with reaching long term financial goals such as retirement. That said, hiring a great financial planner can feel like looking for a needle in a haystack. There are thousands of financial planners to choose from, and it’s difficult to identify which ones have both the aligned incentives and the competence to earn the trust of a client. That’s why it’s important to interview more than one financial planner, rather than hire the first one that has the right credentials. A proper interview allows the client to understand the services an advisor offers, their philosophy and prices. Zoe Financial makes the process easier by identifying the top 10 questions to ask a financial planner.

The Top 10 Questions to Ask A Financial Planner

1.  What is your firm’s philosophy?

When it comes to their firm’s philosophy, the financial planner should have a very clear answer as to where they add value. Although there are many ways that they can answer, clients should be cautious of planners that highlight their portfolio performance, or emphasize financial products they would recommend without first understanding your specific situation. Do they focus solely on investments or provide comprehensive planning? Their answer can provide clues on if the services they offer are right for you.

2.  How do you get compensated?

Those looking for financial help should feel confident they understand how their financial planner gets paid. They should be certain that there aren’t alternative motives behind their services and recommended investment vehicles. For example, if they work off commission, they will likely try to sell products that yield them the highest commission rather than the one that is more applicable to your situation. For instance, if they work for an insurance company, they may try to persuade their clients to buy insurance products rather than invest in low-cost investment vehicles. All things considered, clients should be very clear about how the financial planner is compensated for their services.

3.  What services are included in the fee offered?

Financial planning fees vary widely depending on the service provided and the level of customization. As a result, it is critical to ask specific questions about which services are included in the fee paid. For instance, do they provide tax planning and estate planning as part of the service? Will there be additional fees if the consumer changes their financial plan? How often will you meet to discuss the progress of my financial plan?

4.  Are you associated with any broker-dealer?

This goes hand-in-hand with incentives. If an advisor is associated with a broker dealer, they are likely to have incentives to sell financial products. This is an indication that they will most likely not be working in the client’s best interest 100% of the time.

5.  What financial planning services do you offer?

It is very important that clients find financial planners who have expertise in the areas that they need. For example, some financial planners have spent years helping clients manage their investment portfolio as they approach retirement, while others might be really strong in estate planning. Not all clients are the same, just as not all financial planners have the same experience. The key lies in finding a planner that is well-equipped to help the client reach their specific goals.

Zoe Financial offers examples of some other financial planning services questions to ask a financial planner:

●     “Do you offer investment advice for retirement accounts such as 401(k)s and IRAs?

●     Do you offer estate or college planning services?

●     How will you help me manage an inheritance or my business?”

6.  What is your approach to investment planning?

When it comes to investment planning, a great financial planner will want to understand their client’s complete financial situation before making any recommendations. The planner should understand their short-term and long-term goals as well as their risk tolerance and risk capacity. Anyone looking for a financial planner should be cautious of planners that immediately start talking about their stock market performance. Andres Garcia-Amaya, founder of Zoe Financial, states, “We are big believers that the value-added of a great financial planner is not to ‘beat the market’, but to rather be your household Chief Financial Officer (CFO).”

7.  What is your tax planning strategy?

Taxes play a big role in everyday life, as well as financial plans. A great financial planner will be able to assist in optimizing their client’s taxes. A successful tax planning strategy analyzes income, assets, and liabilities to determine where their taxes can be optimized in the short and long term.

For example, if a person hires a financial planner to help them with creating a holistic retirement plan, they should consider which account offers the best tax benefits. For some, traditional IRAs may be the best choice, while others could benefit from Roth IRAs.

8.  Why do you think I’m an ideal client?

This question should be asked towards the end of the interview. An advisor’s response will show whether or not they truly understand the client’s financial plan and goals. If they do, they should be able to identify how they are planning on helping them reach their financial goals.

9.  Can you tell me about a time you helped a similar client make progress?

This question is related to the type of services that the advisor offers. If they truly have experience, they should be able to give different examples. If they hesitate or give vague answers, it could be an indicator that they don’t have experience with similar clients.

Zoe Financial knows how important it is that consumers are matched with financial planners that can help them with their specific goals or pain points. Their award-winning algorithm connects clients with planners based on their unique financial situation. This ensures that the financial planner has the relevant experience, skills, and processes that are best suited for each client.

10.  How often will we review our plan?

Everyone has different preferences as to how often they want to review their financial plan. Some people only want to look at it once a year. Other people prefer to look at it every few months. It’s important to be clear about how in-the-loop they want to be. In addition, if the advisor doesn’t seem to like the idea of meeting quarterly or semi-annually it likely will be an indication that you will not receive a “high touch” service.

The Easiest Way to Interview a Financial Planner

Finding a top financial advisor shouldn’t be a headache. By diligently vetting each financial planner that applies to the Zoe Financial network and having a matching algorithm in place, Zoe makes the process of interviewing a financial planner a breeze. Zoe strongly recommends that consumers interview at least two financial advisors before signing a contract. This allows them to feel confident in their skills and determine if they’re a right match. 

About Zoe Financial

Zoe Financial’s award-winning algorithm enables individuals to discover and connect with highly vetted, top fiduciary advisors in their area. All financial advisors in the Zoe Network are vetted and verified fiduciaries, along with having top credentials, education, and experience. Zoe’s service provides support from start to finish during an individual's financial advisor search. All consultation calls and interviews with Zoe’s network of advisors are completely free and are offered via video chat or traditional phone call depending on an individual's preference.

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Source: Zoe Financial