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Should I interrogate my financial advisor? Absolutely

Take your time and do your due diligence to ensure you’re getting the value you deserve from your advisor.

So many articles are written about how to find a financial advisor, most of which are pretty good and help point us in the right direction. I have no issues with this but what I wonder sometimes is what are the really honest questions that we should be asking?

No one really likes to be questioned on one’s qualifications, experience or competency but when it comes to your own money – ask the tough questions.

Recently I read an interesting article by Ron Carter, the CEO of a wealth management company in the US, where he talks about the tough questions that one should ask of a financial advisor.

Americans spend more time shopping for a car than they do looking for a financial advisor. Finding a great car is important; you know what you want, what you’re willing to pay and you ask important questions before investing in a new vehicle. But when it comes to finding an advisor it’s just as important, if not more, to take your time and do your due diligence to ensure you’re getting the value you deserve.

I decided to compile my own questions that would put me under the spotlight and that would require an honest look at my own credentials. Here they are:

  1. Tell me about the fees you charge and whether these fees affect my investment returns on the investments I intend to place through your practice?
  2. Do you have insurance to protect my interests in the event of you or your staff’s incompetence or other wrongdoing?
  3. What are you licensed to advise on? I understand that each registered financial advisor must be licensed in various categories to offer various financial services. What are yours and do you have any restrictions?
  4. What is your value proposition to clients such as myself? Everyone is vying for my business. What makes you different and how do you deliver on this in a sustainable way?
  5. I deal with various professionals all the time. Having access to you, your team and more importantly to all my information and history is critically important to me. Tell me, how do you make this happen and how do you protect my information?
  6. Tell me about your career highlights and experience?
  7. What is the purpose of your business? Where do I sit in the totem pole of things for you to do? Everyone talks about their clients being important, but how do you demonstrate this importance in the day-to-day functioning of your business?
  8. I have learnt through the ‘school of hard knocks’ that, while I understand that I may be dealing with you currently, a succession plan is important. Do you have a succession plan and what is it? I do not want to be kept high and dry if you no longer work in the company I deal with.
  9. Finally, are you an accredited member of the Financial Planning Institute of Southern Africa and if so, what is your designation? This is an important question as I know that the FPI members are required to not only maintain educational standards but are also subject to ethical and moral codes.

These questions are not comfortable ones but certainly go to the core of the issues. Trust, transparency, efficiency, economics and economics are some of the pieces that are employed in building relationships. Technology, while widely used, should not dilute these characteristics but rather be aligned to the client’s expectations.

Everyone has the right to ask questions and every CFP® professional would welcome these questions. You the client, intend placing your trust, your money and your financial future in their hands.


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