Choosing a financial planner to work with is an important decision. But what questions should you ask a prospective advisor in your introductory meeting? Below are 10 questions that could help you decide if the planner is a good fit, and our firm’s answer to each.
1. Are you a fiduciary?
Yes. In our opinion, the fiduciary requirement is the most important part about working with an advisor. Many individuals who hold themselves out as a “financial advisor” are not fiduciaries, and their only responsibility is to make sure whatever they offer a client is simply not “unsuitable”, rather than the best thing for the client on an ongoing basis. As a fiduciary, we are charged to put our clients’ interests ahead of our own, at all times. This means regularly discussing with clients their goals, income and expenses, assets and liabilities, and risk tolerance. If any of these have changed, we want to make sure your financial plan and investment strategies continue to match your needs and expectations.
2. What are all the ways you charge for your services?
We have several compensation structures in order to be flexible and work with clients in the way they prefer. Technically, we are “fee-based”, meaning we charge a fee for our services but we also receive commissions on insurance products such as term life and long-term care insurance. For financial planning, we offer hourly or a flat fee based on what services the client needs. When we manage assets for clients, there are no commissions involved. We custody with TD Ameritrade and only use no-load mutual funds and ETFs. We do not receive any commission on investment products.
3. Which licenses, credentials or other certifications do you have?
To work as a Registered Investment Advisor (RIA), we are required to pass the Series 65 examination. The exam focuses on topic areas that are important for an investment advisor to know when providing investment advice. These areas include topics such as retirement planning, portfolio management strategies, and fiduciary obligations.
In addition to the Series 65, two of our advisors also hold the CERTIFIED FINANCIAL PLANNER™ designation. Most people think all financial planners are “certified,” but this isn’t true. Anyone can use the title “financial planner.” Only those who have fulfilled the certification and renewal requirements of CFP Board can display the CFP® certification trademarks which represent a high level of competency, ethics and professionalism. And because we are held to a fiduciary standard of care, a CFP® professional is required to act in your best interest. – See more at: http://www.cfp.net/about-cfp-board/cfp-certification-the-standard-of-excellence/the-four-e’s#sthash.
4. What services does your firm provide?
Our primary services are financial planning and investment management. We work with clients to look at all aspects of their financial lives including investments, estate, insurance, retirement and tax planning. We want to make sure we have helped clients consider their needs, discussed their options and implement the steps to make them financially successful. We do this with a very personal, hands-on approach.
We also offer investment management for clients. We believe in active investment management and balancing the return clients need with the risk they have to take to achieve that return. More on our investment approach below.
5. What types of clients do you specialize in?
There are many types of clients that financial planners can work with including individuals, institutions, trusts, endowments, and employer-sponsored retirement plans (401k, 403b, etc.). We primarily work with individuals and families and focus on personal finances. Our clients range from those just starting out with their first job to those well into retirement. Our firm also specializes in divorce planning. We work with clients on both sides of divorce to help implement an equitable division of assets and work to construct a plan to be financially successful after divorce.
6. Could I see a sample financial plan?
Absolutely! There are many financial planning software programs available to help advisors construct and illustrate their clients’ financial future and make recommendations. We have used a variety of these products over the years including NaviPlan and MoneyGuidePro. We currently use eMoney. We believe this program offers the most comprehensive options for us to build plans of varying levels of complexity. The program is intuitive for our clients and also offers features like a client web portal to see their information and the option to link the client’s accounts in order to update their balances daily. We have sample plans that we always like to show prospective clients so they can get a feel for our planning software.
7. What is your investment approach?
We believe in active investment management. Major bear markets like 2008 can dramatically change financial lives and often cause investors to “cash out” at the exact wrong time. We use tools to help us see the long-term trends of the investment markets so that we can focus on long-term investing. We discuss the varying levels of risk and potential return that each of our investment models offer. We have discretion over our accounts, meaning we decide on the actual investments to use in implementing the investment strategy our clients have chosen. This allows us to quickly make changes as we see necessary. Without discretion, we would need to call every household and get their approval to make adjustments. This would be time prohibitive and would also not allow us to react efficiently to ever-changing markets. Our primary focus is managing market risk while still achieving long-term growth in client accounts.
8. How much contact do you have with your clients?
This varies on the client. We want to tailor our contact with clients based on their preference. We want to meet with our clients at least annually, but often meet much more often. We have some clients who want to meet quarterly and some that prefer to meet only once per year. Clients know that when they call our office, they will be able to get one of our team members on the phone. In addition to monthly account statements and quarterly performance reports, we also send our clients weekly newsletters with various articles we think they will find useful, along with a recap on the investment markets.
9. Will I be working only with you or with a team?
While we do implement a team approach, you will have one advisor who will take the lead on your relationship. They will be the advisor always present in meetings, and they will be responsible for managing your needs and follow up tasks on an ongoing basis. The team approach allows us to collectively discuss our clients and any situations that arise. Every Monday, we take time to go through our client list one househould at a time. We find this useful in making sure we have been in touch with our clients, and it gives us the opportunity to discuss ideas that may be beneficial for all clients.
10. What makes your client experience unique?
Sign up and see! We are happy to provide references. We believe in growing our firm through providing excellent service to our current clients and strive to do the same for new clients.