In Financial Planning
Helping physicians take control of their household finances.

Hiring a financial advisor is a big decision. After all, you’re hiring someone to help guide you through some of life’s biggest decisions.

Your financial advisor can help you decide what type of car and house you can afford. You’ll go to them to make sure you’re saving enough for your children’s college education. You’ll even seek their advice on the best way to build long-term wealth and save for your retirement.

Needless to say, choosing a financial advisor isn’t a decision you should make lightly or quickly. That’s why I’ve included 8 questions you should ask a financial advisor below. That way, you can make sure you’re hiring the right one for you.

Who is Your Firm’s Typical Client?

Some of the best financial advisors in the industry specialize to help a certain type of client. For example, there are advisors who help young couples with kids. There are advisors who focus only on women. At Physician Wealth Services, I only work with physician and physician families.

When you work with an advisor who specializes, you get the same benefit as going to a doctor who specializes. You’ll get to work with someone who truly understands your stage in life. So, always ask an advisor who their typical client is. If you don’t fit that mold, then you might need to interview another advisor to find a better fit.

How Do You Get Paid?

Believe it or not, this is one of the most important questions you could ever ask a financial advisor. The reason is that there is a huge difference between financial advisors who are fee-based and fee-only. Fee-only financial advisors are preferred because they do not sell financial products like insurance where they earn a commission. Fee-based financial advisors sell products and charge commission, and for that reason, it’s very hard for them to separate their own interests from their clients’ best interests.

What Licenses Do You Carry?

There are many different types of licenses a financial advisor can show you to prove that they are allowed to give you financial advice. However, what you’re looking for is an insurance license. Chances are, if your advisor has one of those, they are not fee-only and thus are going to make commissions off of selling you insurance.

How Do You Ensure Your Clients are Protected From Fraud?

Because of the recent Equifax hack, it’s more important than ever to ask how to protect your finances from fraud. Ask your advisor what steps they will take to keep your information safe and what will happen if there is a data breach.

Do You Contact Your Clients Before Making Changes in Their Portfolio?

This is a great question to ask, mostly because people have different preferences. Some people want their advisors to manage their finances for them 100%, balance their portfolios for them, and purchase the funds they think are best on their client’s behalf. Other people like to be informed before changes happen. So, ask your advisor how they typically handle portfolio changes, and make sure it’s in line with what you want in an advisor/client relationship.

What Happens to Your Clients if Something Happens to You?

This is a great question and one not many consider. It’s not the most pleasant topic to talk about, but what happens if your financial advisor dies unexpectedly? What happens to your money and will you have access to your accounts? Make sure your advisor has a plan and directions for what to do should the unexpected happen.

Can You Describe Your Investing Philosophy?

You might not even have your own investing philosophy yet, but it’s important to know if your advisor has one. Some advisors are more aggressive than others. Some will try to make big returns, even if it’s risky. Other financial advisors might be more conservative or might view investing as a long-term process rather than shoot for short-term success.

After interviewing a few different advisors, you’ll likely find out which financial philosophy resonates with you. Once you do, make sure your advisor is willing to take your own personal investing philosophy into account when making financial decisions on your behalf. It’s also important that when your advisor tells you about their philosophy, it’s easy to understand. You want an advisor who doesn’t talk down to you. You’re looking for someone who is happy to teach you about finance so you learn more and more as time goes on.

What is the Best & Worst Financial Decision You’ve Ever Made?

We’re all human, and your financial advisor won’t be flawless when it comes to financial decisions. So, you should ask them what’s the best and worst financial decisions they’ve ever made. This might give you some insight into their risk tolerance or how they bounce back from financial blows. It will help you get to know them, find out what makes them successful, and most importantly, learn how that will impact the ways in which they manage your money too.

Do you have a financial advior or are you currently looking for one? What are some of the qualities you are looking for in a financial advisor?

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