10 Questions You Need to Ask Your Financial Planner

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10 Questions You Need to Ask Your Financial Planner

When selecting a financial planner, make sure you ask plenty of questions. The right questions will help you find professional financial planners who will put your interests first and help you build a financial plan that’s right for you. A poor financial planner, on the other hand, may rake in commission fees while providing little of value.

So when you’re choosing a financial planner, make sure you ask the below questions.

Want to ask PWG Financial’s experts some questions? Get in touch! We love talking with people about financial planning and we always put our customers first.

How Do You Make Your Money?

Asking about earnings can be an uncomfortable topic but it’s one you must broach when speaking with an advisor. Ask if your advisor makes any commission for selling specific products. A financial advisor who puts your interests first won’t skirt around payment and will instead be forthright. Generally, it’s best to work with fee-only financial advisors, like those found at PWG Financial.

What Are the Total, All-In Costs?

Besides paying your financial planner’s fees, you may also have to pay fees to mutual funds and the like. Ask your financial planner about the total costs and what steps they take to reduce fees elsewhere.

Who is the Custodian?

It’s best for an outside company, such as a brokerage firm, to act as the custodian. This is the company holding your actual assets (such as an investment portfolio).  Some financial planners, including Registered Investment Advisors (RIAs) are legally required to use an outside custodian. This can reduce the risk of scams (like the Bernie Madoff Ponzi scheme).  Your assets should be held (custodied) at a reputable firm.

How Do They Handle Conflicts of Interest?

Even a financial planner who always puts clients first may, on occasion, have some conflicts of interest. Yet a good financial advisor will immediately disclose that conflict of interest and how it could affect you.

How Can You Get in Touch with the Planner?

Some financial planners focus on locking up a sale and then do little planning after. These planners are often difficult to get in touch with and are aloof. They may not bother replying to emails or calls until you threaten to walk. The financial advisors at PWG Financial strive to build close relationships with our clients and we focus on making communication easy.

How Does the Financial Planner Measure Success?

Many financial planners use various benchmarks to monitor investment portfolios and the like. Talk with your potential planner about how they measure success and specifically why they use the measurements and benchmarks that they do.  We like to work toward a long term goal, and help you every step of the way.

What Non-Investment Related Considerations Are There?

Financial planning isn’t just about building an investment portfolio. A great planner will also consider things like life insurance, or how to lower taxes. Financial planning should be a total concept and your planner should consider factors outside of investment choices.  Estate planning, tax harvesting, asset protection, and income protection should all be part of the holistic planning.

What Qualifies Them to Manage Your Assets?

Why does the financial advisor believe he or she is qualified to manage your assets? College degrees are nice but on their own they’re don’t provide enough proof of qualifications.  A financial planner should also have real world experience and a track record of success. Ideally, the planner will have already worked with clients in a similar situation as yourself.

How Does the Planner Approach Diversification?

Generally speaking, you want to build a diverse financial portfolio as it may help reduce risk. Talk with your potential financial planner to learn about how they build diverse portfolios and allocate assets.

What is Their Investment Philosophy?

Ask potential financial planners to provide a thorough overview of their investment philosophy. They may use specific strategies, such as value investing, or may suggest diversifying internationally or in alternative assets as well as illiquid assets.  Either way, you should make sure you understand and are comfortable with their investment philosophy.

At PWG Financial, we consider all of the above and more. If you’re looking for a financial advisor who will put you first, get in touch with our team.

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