Once you’ve got your first appointment set with your financial planner, part of the hard work is over. You’ve found the right planner for your needs and budget, done your research on your financial planner, and gathered all the things you’ll need to bring for your first appointment.
There are a few things you should know about any financial planner you’re considering in advance of booking an appointment. Make sure the person you’re considering is a fee-only financial planner, or someone who’s compensated only by the amount you pay, and not by any commissions from products they sell. Also, make sure the planner is a fiduciary — someone who’s required to have your best interests and outcomes in mind when making choices and recommendations for you.
Once you’ve made an appointment, you might already have a list of specific things you want to know. But, there are some baseline questions you should ask during your first appointment to make the most of your new financial planning relationship.
1. How much do you charge, and what will the total cost be?
Being clear on all the costs and charges involved with financial planning is critical. Get an idea of exactly how much the planner you’re considering charges for each service they offer, and what you should expect to get in return.
For anyone hiring someone to manage investments, financial planner Malik S. Lee wishes his clients would take this question one step further. “When people ask questions about cost, they usually think in terms of fees a planner charges directly to them as a client. But that only scratches the surface,” he wrote for Insider.
Oftentimes, the accounts and funds that planners invest your money in also have costs. These costs could include trading costs and expense ratios. Ask about any fees on accounts, and of course, the management fee that the financial planner will charge. The management fee alone is typically 1% to 2% of your portfolio’s value, Insider’s Tanza Loudenback reports.
Have the financial planner total up all those costs so that you’re well informed and better able to compare their costs to other planners you’re considering.
2. How many clients do you have?
Having a lot of clients who already trust them might sound like a good thing, but it may mean trouble for your experience.
Zoe Financial CEO Andres Garcia-Amaya interviewed over 1,300 financial planners when looking for financial planners to hire to join the company. He found that this question was often revealing of not only how much free time they had to offer, but also how attentive their service was.
“A lot of banks have advisors that have 600 or 1,000 clients for each advisor,” Garcia-Amaya previously told Insider. “Most likely, that person is an amazing salesperson, but as soon as they win [your business,] you’ll never see them.”
3. What are your backup or succession plans?
Lee writes that one question his clients don’t ask enough in their first meeting is about what happens if their main planner retires, dies, or otherwise leaves the business. It’s something that, as a financial planner himself, he feels is critical for clients to know.
“Ask about your advisor’s business continuity plan, including their back-up business locations (for events such as natural disasters and pandemics), back-up data plans (for data loss or breaches), and succession plans that detail who the key contact person will be should your main advisor be unable to serve you,” Lee writes.
Knowing these things in advance can help alleviate some stress if they’re ever needed. It will also help you make sure the planner you’re working with is forward-thinking, and has been responsible with their own planning.
4. Who’s your typical client?
This question is meant to reveal something important about your financial planner: who they’re most comfortable working with. Their answer will give you an idea of not just how well they’ll work with you, but also if they have the right strengths and experience for your needs.
For example, a financial planner who mainly works with retirees might not be a great fit for someone needing help with student loans. Asking this question will give you an idea of who they’re most comfortable working with, and know if you’re a good fit for their skills.
5. What are our next steps?
Towards the end of your first appointment, start to make a game plan for your next steps. Perhaps you got all of your questions answered, have a clear path forwards, and just want some help following up on your goals and staying accountable. Or, you may have more questions you didn’t even get to. Wherever you are at the end of the first meeting, make a plan for how you want the relationship to proceed.
You might ask for another appointment in order to make a deadline for yourself. You might also decide on a routine of checking in with your financial planner, and ask how best to reach them if you have further questions. Decide what works best for you, and how that works for your planner, too.
Make a plan that’s specific and concrete — set dates for a follow-up, and put tasks the planner gives you in writing. It will help you make sure you get the most value from the money you’ve spent on your first financial planning appointment.
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