The Do’s Of Starting a Financial Relationship

The questions you should be asking your financial planner


When I meet with prospects I ask, “What questions do you have for me?” That helps me address their specific concerns. The most frequent response I get is, “Well, we just want to know if we are doing everything right.” When I try to tease out actual questions, it becomes clear that some people don’t know what to ask. Thoughtfully worded questions are vital for both the client and the prospect in determining if the relationship is going to work. Here are three questions you might consider posing.

Start with yourself: “How can you help me establish and meet reasonable goals?” This question invites a dialogue and gives insight into the financial planning resources the advisor has. The discussion should center on how the advisor can help you establish what you want, determine if particular goals are attainable, monitor your progress and make necessary adjustments to plans. It is best if goals are quite specific (so they can be measured), such as paying down your mortgage, establishing a retirement date, delineating the different ways to take social security, etc. The advisor should help you define the various steps you can take and how these steps might be altered if life changes.

Understand the underlying investment philosophy: “How will you control risk in my portfolio?” Risk can derail even the best of plans, whether risk comes from asset losses, being in the wrong investments, being too aggressive or not being aggressive enough. For your goals to be achievable, you need to understand and manage risk. When someone else takes control of your money, you want to feel reassured that the person understands your risk tolerance and has an active, disciplined strategy to mitigate risk. Your investments are not an end in themselves. They exist to support your goals.

Ask about them: “How do you get paid?” Advisors get paid for their work, but the amount should be reasonable, transparent and tied to the level of service you are looking for. If you are happy with just investment management, then pick someone who doesn’t pretend to answer questions on retirement income planning, home purchases or estate planning and pay accordingly. On the other hand, if you have a number of unanswered life goals, select an advisor with credentials that match your planning needs along with the requisite investment expertise. And ask to see their fees. If you can’t see your fees, they may be more than you think.

There are many good questions to ask when you are sitting down with a new advisor. Think about specific questions before you walk in the door. Focus on what you want to achieve in your financial life and how the advisor can help.

Betsey Purinton, CFP® is Managing Director and Chief Investment Officer at StrategicPoint Investment Advisors in Providence and East Greenwich. You can reach her by email. The information contained in this report is not intended as investment, tax or legal advice. StrategicPoint Investment Advisors assumes no responsibility for any action or inaction resulting from the contents herein.