What kinds of questions should I ask when interviewing a financial advisor?

A financial advisor should be someone you trust and count on for all of your financial needs. Just like you would interview a doctor, you want to make sure the financial advisor can fulfill the needs of you and your family. Here are some questions to consider when searching for an advisor.

1. What is your specialty and experience? Just like a physician, many financial advisors have an area of financial planning where they consider themselves experts, it also depends on their credentials and licenses. It's very important to find out if your needs are going to be met when forming a long term relationship with an advisor.

2. What are your qualifications? The term "financial advisor" is used by many financial professionals. The advisor may be an accountant or an attorney, but they still fall under the umbrella of "financial advisor". Certified Financial Planner™, CFP® practitioner, a Certified Public Accountant/ Personal Financial Specialist (CPA/PFS), or Chartered Financial Consultant (ChFC) are just a few examples of certifications. Before you meet for your first consultation, determine what type of financial planning you need, this will help you narrow down what types of services you will need now and in the future.

3. What services do you offer? Again this will depend on the advisor's license, credentials and expertise. Some give financial advise for a range of service, but do not sell the actual products, in that case they may have partnerships with individuals who do sell the products and will give their best recommendations.

4. Will you be the only one working with me? Many advisors work with other professionals such as attorneys, accountants, tax specialists, insurance agents etc. It's important to ask if he/she will be the only one working with you or will they bring in other professionals to fill the gap. If so, then ask to meet with the other provider as well.

5. Has there ever been any disciplinary actions taken against you? This is where due diligence as well as asking the question is critical. Ask what organizations regulates their certification as well as what companies they are affiliated with. They should willingly provide this information as well as a disclosure of any disciplinary actions or lack thereof.
Your state insurance and securities departments as well as National Association of Securities Dealers (NASD), and CFP Board keep records on the disciplinary history of financial planners and advisors.

6. Do you have any testimonials? Even if the advisor was referred to you, it's still important to get an idea of how the advisor's services measure up for different people and situations.

7. How do you get paid? Financial advisors are paid in many different ways and it's important to get this information in writing to avoid any surprises later on. You should also get an estimate for the products and services that will be provided. Here are some examples of how an advisor may be paid.

* The advisor may be affiliated with a company who provides a salary. You pay the company and company pays the advisor.
* There may be fees such as a flat rate a percentage of your assets or an hourly rate.
* If the advisor works with partners and recommends products then there are typically commissions paid on those products.
* A combination of any of the above.