As we navigate the complex world of personal finance, finding the right financial planner can be a game-changer. A qualified financial planner can help you make informed decisions, optimize your investments, and create a customized plan to achieve your financial goals. However, with so many financial planners on the market, it can be challenging to know what to look for. That’s why we’ve put together the ultimate interview guide to help you make the best decision for your financial future.

When should I hire a financial planner?

There are three reasons to hire a financial planner:

1. You feel “lost” in planning your financial future and need a roadmap.

This may be true for most of us when we’re starting out. There are so many goals competing for our limited financial resources:

• Paying off student loans.
• Funding a 401K or IRA.
• Saving an emergency fund.
• Buying a house.
• Taking a vacation.
• Getting married.
• Having your first child.
• Starting a business.

It’s no wonder money can feel overwhelming. While it will cost you for guidance from a certified professional, that investment may pay for itself over a long period of time.

If you have an emergency fund saved up and can afford a financial planner without incurring debt, a fee-only financial planner may be a good investment for a solid foundation.

2. When it comes to money, you are not the DIY type. You just want a professional to take care of it.

Do you avoid personal finance and money topics like the plague? If you simply don’t want to deal with the hassle or feel a lot of anxiety about money, then hiring a financial planner may be a wise investment.

What you’ll need is enough assets for a planner to take you on.

Financial planners make revenue in three ways. They can charge a flat fee for services, an hourly fee, or a percentage fee based on assets under management on an annual basis. If a financial planner charges 1% for a client with $1,000,000 in assets, they will receive $10,000 per year.

For those with less than $1,000,000 in assets, you’re better off sticking your money in low-cost index funds or utilizing tech-enabled tools like robo-advisors.

3. You like managing money, but realize your financial plan would benefit from an impartial, unemotional third-party opinion.

Going it alone as an investor can be empowering – but also risky. Even the savviest do-it-yourselfers can miss key opportunities or make rash decisions.

Even seasoned DIY investors can’t match the expertise and perspective of a talented financial planner. That’s where a financial planner brings immense value. Their expertise and objectivity helps you see the full picture. A financial planner provides an essential third-party perspective to avoid emotional investing traps we all face as humans.

And while some balk at paying an advisor’s fee, realize that just one avoided mistake or seized prospect could easily offset that cost and then some. The smartest investors, especially accredited investors, use advisors not as a crutch, but as a spotlight guiding the way to better decisions.

Questions to ask financial planner

If you want to start a relationship with a traditional financial advisor, be sure to ask these 10 questions during the interview process.

1. Are you a fiduciary?

Fiduciary advisors operate under a legal duty to act in your best interest. Non-fiduciary brokers face no such obligation – they can legally recommend investments that serve their own interests over yours.

2. How many clients do you serve currently?

At the core, financial planners are relationship-based business. Even with technology, there are only so many clients financial planners can take on at once and provide meaningful service and support.

You may also inquire on what the maximum number of clients they will take on and understand how they’re able to take on that many clients.

3. What areas of financial planning do you have the most experience with?

Depending on your financial goals, financial planners will provide services like investment advice, tax support, estate planning, insurance and retirement. They may have additional specializations in alternative assets like cryptocurrency, private debt and venture investing for accredited investors.

4. What are your fees?

Fee-only advisors might charge a percentage of the assets they manage for you, a flat fee for services, or an hourly fee. These fees are listed in the Form ADV in which all financial planners should provide.

In your introductory call, you may also ask these additional questions:

• What are my all-in costs for my situation?
• Are you compensated in other ways like referrals or commission?

5. Why do you choose to be a financial planner?

Financial planners come into this profession for different reasons. The most successful financial planners have a growth mindset and will continuously build their knowledge base. They are also passionate about helping their clients achieve clients goals, so it’s essential to find those that love to build relationships.

6. What is your onboarding process like with new clients?

This is another version of: How do you determine your client’s financial goals? What is your philosophy to help clients achieve those goals. The financial planner should be a partner, and it’s easier to stick with a plan if you both are aligned. They should also perform walkthroughs of any software platforms where you can access your data and reports.

7. What is your preferred communication style and frequency?

You want to know how often you’ll meet and whether they’re available for phone calls, emails or direct messaging outside of scheduled appointments. Find the financial planner that fits with your communication preferences.

8. Who is your custodian?

Your financial advisor should hire an independent custodian, such as a brand-name brokerage like Fidelity or Schwab, to hold your investments, rather than act as their own custodian.

9. Who is your typical client?

It is essential to evaluate fit and familiarity with financial planning goals and challenges with proven examples of execution.

This doesn’t just apply to your financial situation, but also if you’re a member of the LGBTQ+ community; Black, Indigenous, or a Person of Color; single, married, or divorced; etc.

Managing finances can be a complex and overwhelming task, especially for those with a lot of assets. It is not uncommon to feel uncertain or insecure when it comes to making financial decisions, and that is where a financial planner can step in to help. The right financial planner can provide the confidence you need to build and preserve your wealth.