Financial planning part 3: What questions should you ask a financial advisor?

Financial planning part 3: What questions should you ask a financial advisor?

So far in this 3 part financial planning series, CEO and Founder of AdviceMarket, Spiros Christoforatos, has run through the recent financial planning reforms and the best ways to find a good financial advisor. To finish off the series, Spiros reveals the top questions to ensure you choose the right financial planner for you.

There are many publications, materials and information on the internet that can tell you what you should be looking for in a financial planner. Just Google, “questions to ask a financial planner?” You will get hundreds of results.

However, in order to compare advisers I think it’s helpful to group your questions into two categories: Soft Value-Add Questions and Factual Questions.

  • Soft Value-Add questions are about getting into the heart and mind of the financial planner that you are looking to engage. I call this “Human Due Diligence” which gives you a feeling about whether you and the financial planner share values, beliefs and what you have in common. Remember, engaging a financial planner is not about a transaction, it’s about building a trusting relationship over time. Also, these questions will help you find out whether the planner has the emotional intelligence, empathy and life experience to be able to help you address your specific needs and objectives.

  • Factual questions are just that, FACTS about the financial planner and are typical of what many pundits say you should ask. Even though these questions are important, they won’t really give you a sense of who the person truly is.

Below are my top 6 questions in each category with a brief summary on why they are important questions to ask. My preference is to get to know the personality of the financial advisor I am dealing with in the first instance, so I would start by asking the Soft Value-Add questions.

Soft Value-Add questions to ask

1. Why did you become a financial planner?

This opens up the emotive reasons. Gives you a sense about whether the planner is client focused or more about their own self-interest.

2. What was your inspiration to get into this field?

Similar to the previous question, this gives you greater insights into the planner’s personal values and alignment with your values.

3. Could you tell me more about who you are, your family and life experiences?

Gives you information about the planner’s life experiences and if they can truly understand and empathise with where you’re at in your particular stage of life.

4. Do you have a financial plan in place for your future both in the short, medium and long term?

Gives you an insight as to what the planner has done for themselves and why, how much they believe in the financial planning process and their appetite towards risk and volatility in investment markets.

5. Will you give me the names of 2-3 clients to ask them about you?

It’s not about whether the planner is willing to provide names of their clients or not, it’s more about their reaction and how proud they are to showcase their work and service ethics.

6. Have you had any complaints levelled against you?

This shows the planner’s integrity and honesty. Generally, customers complain from time to time. However it’s the severity of the compliant that’s important here. If the planner had a complaint that’s service related, there can be genuine reasons why it happened and it may have resulted from a breakdown in the process that fuelled the complaint. If the planner had a complaint that’s advice related, then that’s a cause for alarm.

Factual Questions to ask

1. How long have you been a financial planner?

Gives you a good sense of the planner’s tenure and professional experience.

2. What tertiary and professional qualifications do you hold?

Gives you an understanding of the planner’s discipline, commitment and aligned educational expertise.

3. Are you a member of professional body and are you a Certified Financial Planner – CFP?

Gives you comfort that the planner is bound by their professional body’s Code of Conduct.

4. How do you work out what’s the right advice for me?

Gives you clarity around the advice process the planner uses to truly understand what your needs and objectives are – pre and post advice implementation.

5. How do you charge for your services?

You know what you’re up for in terms of cost for advice – both initially and ongoing.

6. What’s your complaints resolution policy?

You find out what avenues are available to complain if you are not satisfied with the planner.

This is the last blog in our 3 part financial planning series. So if you would like to find out more about financial planning in Australia, read Financial planning part 1: What are the financial advice reforms? and learn how to find the best financial advisor for you by reading Financial planning part 3: How do I find a credible financial advisor?

Financial planning part 3: What questions should you ask a financial advisor? was last modified: December 2, 2015 by Spiros Christoforatos

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  1. This is a good list, although I would do some things differently. We all have our own ways of doing things, after all. I believe the qualifications, certifications, and memberships of a financial planner should be listed on their website. Asking how they charge for their services is surely a must even though it’s already on their website. However, while I would want to jump straight into the factual questions and leave the personality interview for later, I see the wisdom in getting to know the financial planner first. There are those who seem to be in the profession only to earn and will proceed with a cookie-cutter approach. It’s easier to work with someone who has an understanding their client’s current financial position and purpose for building wealth.


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