Top Questions to Ask Your Financial Panner
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Before going to interview any planner, get a copy of the free interview form published by the International Association for Financial Planning (800-945-4237), a national trade group for planners. It offers a checklist to help you ask the right questions of all the planners you consider. Ask any planner you’re meeting the following questions:
Do you specialize, and if so, how? Many planners try to be a jack-of-all-trades and take any client who can pay the freight. Some, however, work primarily with a particular type of client such as small-business owners or widows. Others tend to focus on one area of financial planning such as retirement planning or college funding. Be sure the planner has experience working with people whose financial lives are similar to yours.
How are you compensated? Any reputable planner won’t flinch when you ask this important question. It’s imperative to find out ahead of time both how you’ll be charged and how much.
Can I have a copy of your ADV, Part II? This is a report (the name is short for Adviser) the planner files with regulators noting his or her experience, investment strategies, and potential conflicts of interest.
Who are three of your clients similar to me? You’ll want to talk to them about their opinion of the planner. Tell the planner you’d also like to see at least one recent written financial plan; the planner can block out the name of the client for privacy protection.
Getting action against a financial planner who defrauded or looted you is even tougher than fighting a bad broker. No formal body censures wrongdoers. The best advice: Try to work out a settlement with the planner or with his or her firm. If that doesn’t work, you’ll have to go to arbitration or sue. That’s when good record keeping becomes critical. You’ll bolster the chances of winning your case if you have kept notes about the planner’s promise that a certain dicey investment is low-risk, for example. If you win, you might even consider putting that chunk of money into an investment you select all by yourself.
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One Response to “Top Questions to Ask Your Financial Panner”
Thanks for the tips. Do you recommend working with a financial planner from a smaller firm or from one of the giant firms like a Charles Schwab?
Craig
http://www.budgetpulse.com
By
Craig (Who am I?) on Sep 23, 2008