Working with a financial professional can help you make more informed financial life decisions, whether you decide to work with a financial advisor or life insurance agent, or someone else. But choosing the right professional to work with can be a bit of a challenge, especially in an industry that has long relied on word-of-mouth recommendations. 

There are a number of reasons to choose a professional to help you with your finances. Maybe you have a new job with better pay and benefits and want to make the most of your newfound prosperity. Or possibly your life has changed because you got married, had a family, or got divorced, and you want to make sure your financial strategy takes those changes into account. Maybe you’re not sure whether you have the right mix of investments to achieve your return goals. Which type of financial professional you need will depend on your situation – you wouldn’t go to a financial advisor to help file your taxes, just like you wouldn’t go to a dentist to fix a broken bone. 

Finding the right fit: Questions to ask a financial professional 

No matter why you’re looking for help, finding the right fit is important. You may be tempted to hire the first person that you interview or to choose a professional who gets rave reviews from a friend or a colleague. But everyone’s financial goals, priorities, and preferences are different.  

That’s why it’s critical to do your research and find a financial professional who fits your personal needs and situation. Here are seven questions to ask a potential financial professional that will help you find your ideal financial partner. 

#1: What services do you provide? 

Many financial professionals are licensed differently and specialize in specific areas, like retirement planning, investment management,  insurance or estate planning. Try to find one whose expertise aligns with your needs. For example, if you are looking for someone to help you fine-tune your 401(k), be on the lookout for an advisor who has experience in retirement plan vehicles. If you’re worried about investment risk in volatile markets, focus on someone with strong investment management skills. In the market for a new life insurance policy? While a financial planner might be able to help guide you, an insurance-focused professional will likely give you a more complete picture of your options. 

Remember that your financial planning requirements may also change as you move through life. A financial professional with broad skills can help you at every stage of your journey, from building up assets to planning for major purchases like a home to preparing for retirement.  

#2: How do you charge for your services?  

Financial professionals receive their compensation in a number of different ways, and the way they get paid can have a significant impact on your relationship with them. Talk to potential partners about how their fees are calculated and get a sense up front of how much you’ll be paying.  

For instance, some financial advisors receive a fee based on the size of the portfolio they manage. This is called an asset-based fee. This fee structure aligns their interests with yours. The better your portfolio performs, the more compensation they receive.   

Other financial professionals receive commissions on the products they sell you and the transactions they execute for your account. This is called a commission-based fee structure.   

Finally, some financial professionals charge a flat fee for services. This may be attractive to those who have specific questions or issues to solve, such as choosing funds for their 401(k) or investing an inheritance, but don’t require an ongoing relationship.  

# 3: Who is your average client? 

Financial professionals often focus on a specific sector of the marketplace, for instance, business owners, corporate executives, or young families planning a college fund for their children – some specialize down to details like age and gender. Find out if the candidates you’re interviewing have experience serving people whose situations might be the most similar to yours.  

You might think that the best financial partners would be those who serve the richest clientele, but in fact, someone who has spent their career learning the intricacies of the ultra-high-net worth market may not be a good fit for a person who is just starting to accumulate assets.   

In addition, there are often nuances to planning for specific kinds of clients, for instance LGBTQ families or self-employed professionals, that only a specialist will understand. It can be critical to highlight these questions to ask a financial advisor in a first meeting to decide if it’s worth moving forward.  

#4: What is your financial philosophy? 

Different financial professionals have different philosophies about finances. Some are more risk averse than others, for example, while specific views about certain asset classes, timelines and strategies can all have an impact on how you are able to work with any given financial professional. 

Say you have a generally conservative view on managing your or your family’s finances - you may want to prioritize long-term stability over short term growth, with a focus on long-term planning. A financial partner who starts every conversation with a spiel on cryptocurrencies might not be the right option for you at this time. 

Ask potential financial professionals how they think about finances, what’s important to them, and how they go about creating strategies. Make sure it’s in line with your own approach and preferences.  

#5: How do you like to work with your clients? 

Do you need to see your partner face-to-face on a regular basis or would you rather receive updates by email or over the web? How are questions and client problems resolved? It might even matter to you, or the financial professional, whether they get to know you as a person or whether they keep the relationship strictly professional.  

Some other financial professionals will work with a team, which can be helpful in some instances for the service of your products or plans but may not always be necessary. 

Find out how each potential partner interacts with their clients, whether through quarterly meetings, phone calls, email, or an online portal, and choose the one that best fits your needs.  

#6: What are your credentials? 

Financial professionals can earn a wide variety of accreditations, demonstrating special expertise in different areas. Each credential carries with it different knowledge sets, specialties and professional requirements, and not all of them will be right for you. Here are some that you might encounter: 

• Chartered Life Underwriter (CLU): Primarily for insurance agents, this accreditation is awarded to people who pass exams covering life and health insurance, pension planning, insurance law, taxes, investments, and estate planning.  

• Certified Financial Planner (CFP): These professionals have completed a broad-based education program in more than 100 financial topics including stocks, bonds, taxes, insurance, retirement planning, and estate planning.  

• Certified Public Accountant (CPA): Tax accountants receive this designation after more than 150 hours of training in tax, financial reporting, and advisory services.  

• Chartered Financial Analyst (CFA): This designation indicates extensive experience and expertise in economics, portfolio management, and securities analysis. It is held primarily by portfolio managers and research analysts as well as financial advisors who specialize in managing portfolios.  

#7: Can I speak to one of your current or former clients? 

After you’ve met with a financial professional, you may also want to touch base with one or more of their current or former clients. These references can give you an insider’s view of what it’s like working with them.  

Even if you found this particular financial professional from a referral from a friend or coworker, see if they’re willing to have you speak to other clients. 

Some questions to ask their current clients could be: 

• How long have you been working with your financial professional? 

• How often do you meet with your financial professional? 

• How often do they reach out to you with updates? 

• How responsive is your financial professional? 

• Would you feel comfortable recommending this person to a friend or family member? 

It’s always a good sign when a financial professional is willing to provide a client reference. This can show they are confident about the service level they provide. On the other hand, financial professionals who refuse to let you speak to references may think you won’t like what you’ll hear.  

Finding a match for your financial needs  

Finding the right financial professional is an art, not a science. You have a lot of options, and it’s up to you to identify professionals with a mix of expertise, focus, philosophy, and service that best fits your specific needs. Remember, it’s your life and your money. Just because a friend referred you to this particular financial professional, or you’re already working with them doesn’t mean you have to stick with them if you don’t feel they’re the right fit.  

Doing your due diligence and asking the right questions at the start of the relationship can help ensure you’re making a sound decision for your finances, but you can also use these questions as a way to evaluate your current relationship. What’s important is that you feel confident and comfortable with the financial professional you’ve chosen to work with.