My wife and I are in our mid-50s, probably 10 years from retirement. We have about $1 million in retirement assets and need to decide on a financial planner to ensure income for the rest of our lives. We've met with two planners. What are the key questions we need to ask these planners? How do we decide which planner to hire?
The Financial Planning Association® (FPA®) has a list of interview questions to help you hire a financial planner that is right for your unique financial situation. Among other resources, you'll find this brochure, How a Financial Planner Can Help You ... and How to Choose the Right One, and this checklist, "Questions to Ask a Financial Planner."
FPA member, Russ Owen, CFP®, of SRM Advisors, offered these questions:
- Did either of the planners you met with provide you with a plan on how they would help you meet the goal(s) you expressed? This is really the first and most important question.
- How will the planners implement your plan or strategy?
- How you will pay for the planner's services?
"I would point out that how a 'professional' is compensated does not suggest that one is better than another," said Owen. "The important question: Do you trust this person? Ask for references to some of his/her clients and talk with them."
Others agreed. FPA member, Philip White, CFP®, of Ducere Capital said, "The most important thing you want to be aware of is this: Where are the conflicts of interest? Are the planners really trying to help you or sell you something? How does this adviser get paid?"
In addition, Owen said you should ask each planner you interview to share with you what types of 'strategies' they can or cannot provide to you.
White offered this advice: Take your time when trying to select a planner who's right for you. FPA suggests interviewing at least three planners to make sure you are matched with a planner that can best help you.
White also recommends that you check out the disciplinary history of the financial planner. For instance, an adviser offering annuities should be found in the National Association of Insurance Commissioner's database and advisers should be found in FINRA's database.