10 Things You Need to Know Before Hiring a Financial Planner


Here, a financial educator tells you what you need to know before you hire an investment consultant or advisor to plan your financial future. He shares the questions to ask a financial planner, and tells you what to watch for when hiring someone to advise you about your money.

“It is important to talk to several planners before selecting one in order to find one with whom you are comfortable,” says Certified Financial Educator Clint Gharib. “Interview financial planners like you would anyone you would hire, whether employee or a contractor.”

Hiring a financial planner may be more important than accepting a new job or hiring an employee, so take your time. Never make impulsive decisions when you’re dealing with money problems – even though investing your finances isn’t exactly a “problem.”





4 Questions to Ask a Potential Financial Planner

I really should write an article on how to find a financial planner. Searching for “financial planners” on the internet may not be the safest way to locate someone who will invest your money for you. Your best bet might be to ask friends and family who they recommend – but you still need to ask these questions of whomever you hire…

How are you compensated?

Would you ever hire an employee or contractor and not know what you are paying them? There are several ways financial planners can be compensated: commission only, percentage of assets only or a combination of commission and fee.

Are you an investment advisor, broker or both?

In most cases it is preferable to work with a financial professional that is both a broker and advisor. One of the reasons it is important to know whether the planner you are interviewing is an investment advisor, broker or both is because not all products make sense to be charged a commission or a percentage of assets. It is in your best interest to make sure your financial planner has the flexibility to charge a commission when it makes sense and fee based on the percentage of assets managed when it makes sense.

How often do you recommend my portfolio be reviewed?

You should have a clear understanding of how often your planner will contact you. I recommend at least quarterly contact to review the performance of your portfolio, to keep your planner up-to-date on any life changes (employment, marriage, divorce, etc.) and to review the current market and make sure your investments are still in balance with achieving your financial goals.

How long have you been with your current firm and how long have you actually been advising clients?

A mistake many people make is simply asking how long a planner has been in the business.

Look at the Best Strategies for Investing Money for Long-Term Growth, and ask a potential financial planner what he or she thinks of them.



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4 Mistakes Investors Make When Working With Financial Planners

  • Investors don’t clearly know how much they are paying annually for all fees and costs.
  • Investors don’t ask how long the planner has actually been advising clients.
  • Investors believe if they get references the planner must be good.
  • Investors don’t clarify their expectations with their planner.

Tips for Working With a Financial PlannerDon’t rely solely on references. An advisor will not have you talk to a current client that is unhappy with their performance so therefore references aren’t objective. Does the advisor take the time to answer your questions in a way you clearly understand? Do they ask you questions about your current lifestyle, financial need, goals and fears?

If you haven’t figured out what you want from your money, read 10 Tips for Achieving Financial Goals.

3 Tips for Working With a Financial Planner

1. Always bring concerns and questions immediately to their attention so you can resolve any issues/concerns and move forward.

2. It is important the planner understands the best way to communicate with you, the best times of the day to talk and how often do you expect to be contacted. If you haven’t heard from your advisor on a quarterly basis proactively contact them.

3. Clearly outline your expectations. Investing your money is as much your responsibility as it is the planners’!

2 Surprising Facts About Financial Planners

1. Financial planners will take great care when initially setting up an account to optimize their client’s portfolio performance. Some planners, once they’ve designed your portfolio, put too much faith in their initial portfolio allocation and don’t consistently review it. That’s why it is important to proactively communicate with your planner on a regular basis and notify them of major life changes (marriage, births, employment, etc.) so they can review your portfolio and ensure your investment strategy is in alignment with your goals.

2. Many financial planners like it when a client takes an active interest in their portfolio and asks questions because it helps align expectations and becomes more of a partnership.

For more tips on achieving your financial goals, read 5 Tips for Taking Control of Your Personal Finances.

Clint Gharib is a 20 year veteran of the investment industry; he joined J.P. Turner & Company, LLC in 1998. As an investment adviser and Certified Financial Educator (CFE), Clint’s specialties include asset modeling, retirement planning, insurance products, real estate investments, college savings plans and estate and tax planning.



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2 thoughts on “10 Things You Need to Know Before Hiring a Financial Planner

  • Laurie Post author

    Thanks, James – I agree! The better you know your financial planner and the more familiar you are with your investments, the happier and more secure you’ll feel.

  • James Bergman

    I think that it should just be common sense for you to communicate with your financial planner often. The only way they can make sure your portfolio and your plans are aligned with your goals is if they know what those goals are. Obviously, you should trust them to invest your money wisely, but it is probably a good idea to ask why they are investing your money where they are. This more you know about what they are doing with your money, the more you will trust them and the better your business relationship will be.