Questions to Ask Your Financial Planner Before Hiring Them

Suppose you want a new laptop. You boggle your mind with several questions, watch hundreds of videos and ask friends before choosing the one. But which one do you buy? It’s the one that suits your needs.

It’s not necessarily the most expensive one in the market. There are cheaper laptops out there that fulfill your needs. You always select the one that fits your budget and requirements.

The same principle applies when you’re hiring a financial planner. There are many of them out there with fancy degrees and big bills. It would be best to ask the right questions to find the perfect one—someone who can give you what you need.

Let’s begin by understanding why you need them.

What Does a Financial Planner Do?

A financial planner is a person who excels in the matters of finance, budget making, investment, and taxes. He uses his knowledge to help clients achieve their financial goals. He guides them towards better financial decisions so that they make the most profit from their investments and save up on taxes legally.

Their services generally include:

  • Tax planning
  • Risk management
  • Estate planning
  • Investing consultancy
  • Asset allocation

A financial planner uses various tools to determine the outcomes of various decisions regarding money. Their clients can be anyone, from an individual, big corporation, or wealthy family. Some financial planners hold the CFP that adds to their credibility. They charge more and work with more influential people. 

Why Do You Need a Financial Planner?

The first reason is quite obvious—you’re a big organization that needs someone to make monetary decisions. But if you’re not a company, other factors come into play. These are:

  • You don’t know anything about managing money
  • You need someone to help you with your investments
  • You need to create a retirement plan
  • You’re in debt, and you want to make plans to settle it
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You qualify to hire a financial planner if you relate to these reasons.

Questions to Ask Before Hiring Someone

  • What are your charges?

People think that the cost is an amount that your planner is going to tell you, which you’ll pay monthly. That’s only a part of the whole thing. Financial planning comes with many extra costs, like some percentage of your investment portfolio for managing your account. Then there are trading fees on top of it. Some fees are as follows:

  • Fund management
  • Portfolio management
  • Asset management
  • CFP fees
  • Managed account fees
  •  How many people are you working with?

This question can’t be skipped. A financial planner works with many clients at once. If you’re a corporation, you should see what other companies the planner manages. A financial planner with more clients must seem brilliant. It’s easy to assume why a bad performer would get so many clients. But if you dig deeper, you’ll see that some financial planners are just amazing salespeople. Once they seal the deal, they’ll start dodging calls and messages.

  • What is your backup plan in case of an emergency?

The thought of an emergency where money is involved is quite threatening. But it’s important as your financial planner is an actual person who can have medical emergency or family issues that may come up and last longer than you’d like. Also, they can die. Therefore, it’s better to understand what strategies they have in place for such emergencies.

  • What kind of people do you work with?

Many planners work for specific industries. Some work for only companies and not individuals. You should ask this question and gain insights into their portfolio. This is a great question to figure out if they’re a good fit. For instance, a planner who works with people to clear their student loans might not be the best suited for asset management.

  • What will the next steps be after you’re hired?
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After gathering all the necessary information, it’s time to seal the deal. You must ask about the further steps in the process. These may include their plans for you, some schemes that they may want to introduce, or why they’ll want to do some research. Their answers will give a sneak peek into their work ethic and sincerity.

Finance can be a little complicated, so most people don’t want anything to do with it. They are the “invest and forget” kind. If you’re one of these people, then it’s best for you to hire a trustworthy person to handle your money and provide you with good returns on your ventures. Now that you know what questions to ask, you’ll be able to find the ideal person to handle your money.

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