GREENSBORO, NC -- You save all your working life for retirement. The person you allow to control that money, needs to be someone you're really comfortable with. That kind of access means lots of questions.
Matt Logan of Matt Logan, Inc. gives us an insiders view of the questions you should be asking and the answers you need to be wary of.
Do you have any designations?
This question is to see if the advisor takes education seriously. While licenses are required, having a Certified Financial Planner(tm), Chartered Life Underwriter(tm) or Chartered Financial Analyst(tm) designation demonstrate that the advisor has gone above the required minimums to become more educated in his or her career.
How long have you been in the financial industry?
Experience is valuable in the financial planning industry and you do not want to hire someone to learn on your accounts. Also, with a very high failure rate with estimates ranging from 85% to 95%, I recommend that people seek out an advisor with over 5 years experience in financial planning.
Are you licensed and do you have a clean record?
This is kind of a trick question because you can find the answer out on your own. FINRA (The Financial Regulatory Authority provides "Brokercheck" on their website. On this site, you can go read about any disclosures or complaints your potential advisor may have. While having regulatory issues and disclosures does not make someone necessarily a bad advisor or a bad fit, you should be very comfortable with any explanation you are given here.
How are you compensated?
This is not a tough question and should be answered very easily by any advisor that you work with. If you are sitting with an advisor who says that there are no fees or commissions or is vague about how they are compensated, that is a pretty good indication that you want to keep looking.
How much contact can I expect from you?
I am always amazed when people enter my office and tell me that they have not heard anything from their advisor in 5 years. That being said, apparently it does happen. While you most probably do not require monthly meetings to review performance, this question will allow you to both have an idea of expectations moving forward.
Do you have a succession plan?
It is well known that there is a lack of young talent in the financial industry. In a study by Accenture, the demographics for the financial industry are not good. 21% of advisors are over 60 years old with less than 25% under 40 years old. If you are near retirement and interviewing with someone your age, you may end up seeking out a new advisor in a relatively short period of time. Be sure to ask an advisor about their succession plan and plans for their career so that you can know what to expect. The ideal situation is a long term relationship, so make sure it is a possibility.
A few other tips that are very important in deciding on a financial planner.
First, trust your gut. If you do not have a good feeling about it, interview someone else.
Second, be wary of anyone who is pitching a product. While financial tools are necessary to build out your financial future, if you feel like the focus is on selling, and not you, keep looking. Remember, this is a long term relationship.
Third, take your time. Be sure to kick the tires on people and be comfortable with your decision. This should not be rushed.
Fourth, go online. You can do a lot of homework online. I recommend using www.cfp.net as a resource to connect with some of the great financial planners in our area. You can also go to my website www.mattloganinc.com for more information on financial topics you may find helpful.
Matt Logan is a Representative with Matt Logan Inc and Summit Brokerage and may be reached at www.mattloganinc.com, 336-808-0126 or firstname.lastname@example.org.
Matt Logan Inc is an independent firm with Securities offered through Summit Brokerage Services, Inc., Member FIRNA, SIPC. Advisory services offered through Summit Financial Group Inc., a Registered Investment Advisor.