When you are considering engaging a financial and investment advisor, it is important you do due diligence to make sure you are employing the right person for you.
These questions will help you to make a good decision. They will give you an insight into their professionalism and experience as well as into their investment philosophy and their integrity. It will also give you a sense if they are the right adviser for you and if you are the right client for them.
- What experience do you have?
Ask about their professional work experience, how many years they have been practising, where, and how it relates to their current practice. You want someone with sufficient experience.
- What qualifications do you hold?
This is an important question to ascertain that you will be in the hands of a qualified professional. In addition to qualifications, you can also check they are a member of an industry association and are committed to continuing professional development. They should be able to tell you this.
- How and where are you licensed?
This can relate to the individual you are speaking with and also their company. Check what license they hold, where it was issued and which regulatory body supervises them. It is important to make sure it is credible and professional.
- Are you independent?
This question is asking both about the type of license and how they operate philosophically. A firm that is independent must operate in the best interests of the client, must consider a sufficiently broad range of solutions from across the breadth of the market and cannot ever receive any commission or inducement from a product provider.
- Describe your typical client that you work with
the purpose of this question is to see if they describe someone like you.
- How do you get paid and how do I pay you?
This is actually three questions. First how does the firm get paid? Do they receive commissions or overrides from product provider? If they do they are not independent. Second, how does the adviser get paid? Is it salary or commission? Third, how do you pay them? If they tell you there is no charge, this is always a red flag and not an appropriate answer. It means there is a commission payment hidden somewhere. The firm should be clear in how much and how you pay for the service you receive. In fact, if you engage them, make sure they give you this in writing.
- What is your financial and investment planning approach?
In this question you will get an insight to how they look after their clients and how they structure the advice they provide.
- What ongoing service can I expect? Very important. Once you are set up as a client, you want to make sure you are not forgotten and that you will receive regular contact and updates from your adviser and the firm.
Partnering with the right professional firm can have a significant impact and help you to achieve your financial and life goals. These questions will give you an insight to be able to make an informed decision about engaging the right financial and investment adviser for you.