Excuse Me, Mr. Financial Advisor?
Today was a pretty exciting day in the great halls of Columbine Wealth Planning.
When I started my firm, I affiliated with a group called the XY Planning Network, co-founded by Alan Moore and Michael Kitces. With all due respect to Alan, who is a tireless source of energy and a visionary, it is Kitces that sits atop my Mount Rushmore of heroes in the financial services business and was one of my very early influences in crafting the way I wanted to run my firm.
I had followed him for years and had researched XYPN thoroughly before I launched, and it was the only group that I wanted to be associated with.
Well, today I received my official profile on the XYPN website. Take a look…super exciting!
Fee Only Fiduciary
What I’m most proud of is on the left of the profile page where it says I signed the Fiduciary Oath.
More simply put, I’ve sworn to treat my clients in their best interest and always put their interests ahead of my own. Does your financial advisor act as a fiduciary? Have you asked him or her?
It got me thinking about what other things we should be asking a potential financial advisor – no matter if that person is an insurance agent, a stock broker, or an investment adviser representative.
What Questions Should I Ask?
There are countless articles on great questions to ask before you sign an agreement with someone that is going to help you make financial decisions. I have a link on my website you can use from the CFP® Board of Standards – they provide 10 great questions.
Not to be outdone, Jason Zweig of the Wall Street Journal has 19 Questions to Ask Your Financial Adviser.
All of these questions are important (and yes, I realize that some are the same or similar and overlap). However, if you held my feet to the fire and asked me the simplest way to approach this and keep the questions to only five, here is what I would ask:
1. Are you a Fiduciary and can you show that in writing?
2. What is your experience and what certifications do you have?
3. What services do you offer?
4. How much do you charge for those services and are the fees negotiable?
5. How often will we talk in a given year and how do I get in touch with you if a question comes up?
Your advisor should make it very clear how often you will be interacting together, how much you pay and what you pay for, and whether or not they are acting in your best interest. Them having experience and having earned some designations should give you a rough idea of competence.
Without these core principals in place, everything else kind of falls apart, no matter how nice they dress.
Be your own advocate and ask these questions because nobody else is going to stand up for you. Find people you trust and do some research. There is a change in the air in the financial services industry and you, the client, are going to be the ultimate beneficiary.
Full Disclosure: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please see my Terms & Conditions page for a full disclaimer.