What To Ask a Financial Advisor
FaithFi: Faith & Finance | Aug 31, 2023
Show Notes
When you do, you’ll also find a long list of questions you can ask potential advisors. We’re going to give you some of them today, though, because “folks have been asking.”
The first thing you should understand is that the type of advisor you’re interviewing will determine what you ask. And that only makes sense, because you’ll need different information from a financial planner than from an investment professional or a tax attorney. So let’s go over some of these questions by category:First, a Christian financial planner. They equip people to use God-given resources to accomplish God-given goals. The Christian financial planner can: (1) Help clients identify their God-given goals and quantify how much is necessary to accomplish them. Some of the questions you’ll want to ask include:
QUESTIONS FOR A CHRISTIAN FINANCIAL PLANNER
- How do you integrate Christian values into your advice?
- How long have you been a financial planner, and what licenses do you hold?
- And, describe the financial planning process.
Next we have investment professionals, and this could be a fee-only investment advisor or investment consultant. This person provides professional expertise to managing investment assets held in retirement accounts, trusts, individual, and joint accounts. A fee-only investment advisor is compensated by fees directly from the client.
An investment consultant is compensated from commissions derived from the purchase or sale of a stock or mutual fund.
QUESTIONS FOR AN INVESTMENT CONSULTANT
- How do you integrate Christian values into your advice?
- How do you determine whether or not a client should be investing?
- What is your investing experience and philosophy?
- How do you select the most appropriate investment options?
- Where are your clients’ investments held? A brokerage firm? A mutual fund? Which one?
- If a brokerage firm or mutual fund holds your clients’ investments, does the brokerage firm or fund charge separate fees for this?
- What type of investments do you use? Load or no-load mutual funds? Stocks? Bonds? Annuities?
- How do you monitor and how often do you report investment performance to your clients?
- How do you consider the impact of income taxes on investment choices?
- What other financial services beyond investments do you offer?
That’s a lot of questions for an investing professional, but asking them should give you the information you need to make a wise decision.
Now what if you need a tax or estate planning attorney? What should you ask those candidates?
TAX OR ESTATE PLANNING ATTORNEY QUESTIONS
- Can you tell me about your practice and ways you integrate a biblical worldview into your advice?
- What are your areas of specialty?
- Can you share examples of complex cases you have handled?
- Have you handled many cases in my area of need (whether that’s estate planning, business succession, tax planning, or something else?)
Okay, maybe you need someone to help you with tax preparation. That would usually be a certified public accountant.
QUESTIONS FOR A CPA
- Can you tell me about your practice and ways you integrate a biblical worldview into your advice?
- How long have you been a CPA? What other licenses do you hold?
- Have you helped clients in a similar situation?
- What is your approach or perspective in interpreting tax laws and regulations and accounting and auditing standards?
- How about an insurance professional?
QUESTIONS FOR AN INSURANCE PROFESSIONAL
- What’s your biblical worldview regarding insurance needs?
- Are you required to recommend specific insurance products?
- How many companies do you represent? What’s the rating of those companies? (Rating agencies include AM Best, Standard & Poors, and Weiss.)
- Do you receive higher compensation for recommending proprietary products?
- What percentage of your business comes from insurance commissions?
And finally, a few additional questions you should ask all CKA professionals you interview:
- How long have you been in practice? (experience)
- How long will it take for you to do my work? (services)
- Do you have clients with situations similar to mine who might be willing to speak with me about your services? (referrals)
- Have you ever had any complaints filed against you with any organizations that regulate you? (reputation)
Well, there’s a partial list of questions to ask prospective financial advisors. We’ll put a link to the whole list in today’s show notes.
On today’s program, Rob also answers listener questions:
- Is now a good time to refinance your mortgage?
- What should you do if you have a house on the market that isn't selling?
- Would it make sense to convert a large amount of cash savings to a foreign currency?
- What should you do if your spouse is refusing to be transparent about their finances prior to the marriage?
