Before you hire a financial advisor, do yourself a favor and ask these three questions.
When it comes to your financial future, finding the right advisor for you can impact the trajectory of your finances throughout your lifetime. And while it can be difficult, it’s not impossible. Here are three questions that you should always ask before you hire your financial advisor.
Question number one is, what are your credentials? So, admittedly, our industry has an alphabet soup full of letters behind people’s names—some of them arguably carrying a lot more weight than others. One of the credentials that you’ll see pretty regularly and for the most part is known as the gold standard in the financial planning industry is the CFP® designation, or CERTIFIED FINANCIAL PLANNER™.
That said, there are a bunch of other designations, especially in niche categories, that carry a lot of weight. So if you see that alphabet soup behind a potential advisor’s name, go ahead and ask them, “What does that designation mean? What does that acronym mean? And what value does that provide when it comes to building out my financial plan?”
Question number two is, how do you get paid? So transparency is super important here at our firm, Quantum. And in our industry, it is not uncommon for us to work with new clients who have absolutely no idea how their current advisor is getting compensated. So ask the question, have that candid conversation, and it should be pretty straightforward to understand.
If you don’t understand how your advisor’s getting paid, that might be a signal that you want to look under the hood and really make sure that you understand that, because it could be more than what you’re thinking it is.
And question number three is, what does your process look like? So “financial advisor” is a super broad term. And as a result, every advisor has their own processes and service models. So some advisors offer only investment management, others offer only financial planning—and everything in between. So just because you see the name “financial advisor,” it doesn’t mean you’re going to get the same service model at every firm you look at.
So be sure to look under the hood. What is that process? You don’t want to get in a situation where you’re expecting advice around taxes, estate planning, real estate investments, all of these things that are important to your overall net worth, and find out that your advisor, their business model is to only manage your investment portfolio. Which is totally fine—you just need to make sure that what you’re looking for is in line with what your advisor is offering.
I hope these tips were helpful for you as you’re on your journey to find the right financial advisor for you. If you’re a real estate agent, we’d love to have the conversation if Quantum would be a fit for helping you achieve success in your own personal financial plan.
Schedule a complimentary insight meeting to discuss your situation and how we may be able to help.