Meeting new financial advisor....

[MomofFour]

My DH and I have an appointment on Saturday to meet a new financial advisor. They are fee only, we found them through NAPFA.

I thought I would ask here before we go if there are any specific questions you think we should ask them before we decide if we are going to work with them or not?

[creditcardfree]

I'd find out if they promote variable or fixed annuities as investment products. If so, I'd steer clear away. Also avoid whole and universal life insurance.

I'd probably word that different in person.

[noppenbd]

Find out if they make any fees from any of the mutual funds they sell. If so, steer clear. You want someone who can offer you the best investment for your money, period. That is usually not the investment that is going to generate a lot of commission for an advisor. The funds that they will put you in should not charge 12b-1 fees. That is a big red flag for me.

Oh, and if his name is Madoff, politely head for the door.

[kork13]

Find out if their financial philosophies jive with your own, perhaps even to the point of asking what they are invested in, and if they're the "buy and hold" type or if they "buy, then sell when the time's right". If you're financially conservative, you don't want a financially aggressive advisor, and vice-versa.

Also, ask for specifically what his/her skill set is in--if they specialize in investments, retirement planning, money management/budgeting, and so forth. Most people will have a strength in one area above others, so find out what their's is.

[jIM_Ohio]

Ask about financial philosophies
ask about their expertise
tell them what you need help with
tell them what you do NOT need help with

in that order

[creditcardfree]

You might learn by just listening to what the advisor has to say, too. Of course, realize they will be trying to sell you their skills. They should not be sending you to commissioned based funds, if they are a fee based advisor, in my opinion.

Always read the prospectus of any investment you make. Fees are outlined on pages 2-3 of ALL mutual funds.

[creditcardfree]

Ask about financial philosophies
ask about their expertise
tell them what you need help with
tell them what you do NOT need help with

in that order

Ditto

[tripods68]

Things to ask...I'd say

What is your investment philosophy especially today?

How do you protect your client asset?

Do you prefer No load or load funds?
low expense ratio vs. high expense ratio?

How long you been in the business (Preferred at least 10 years of industry experience)?

How many clients do you currently have?
Do you managed asset clients? If so, how much?

[snafu]

Credentials? Certified Financial Planner [CFP]

[MomofFour]

Credentials? Certified Financial Planner [CFP]

There are two advisors who work together where we are going. They are both CFP's and also are NAPFA registered advisors.


Thanks so much to everyone for the great responses! I am updating my questions list!

[jIM_Ohio]

There are two advisors who work together where we are going. They are both CFP's and also are NAPFA registered advisors.


Thanks so much to everyone for the great responses! I am updating my questions list!

Ask about expertise.

Know that the CFP is a VERY VERY broad certification- some people which have it sell life insurance, some sell stocks, some might only do budgeting, some might only recomend mutual funds, some might be call center people for a brokerage house. Some might be tax experts/ tax professionals. To pass the test you need to know taxes (income and estate), insurance (term and permanent), securities (stocks, bonds and others). Equivalent of a series 6, LAH and enrolled agent rolled into one test (I have been told by CFP's that the CFP is the hardest test they ever took).

Look up "CFP preperation course" and it will often show the various occupations which go for the credentials. There is one at Xavier U in Ohio which I have looked at myself- the credentials mean little until you know what the person's expertise is.

People in your situation should be looking for the CFP (it is a good thing they have it), but the CFP does not prevent the planner from selling you anything- remember they need to get paid somehow. The letters mean they passed a test, not that their advice will be objective.

[RedHotLama]

It looks like people have no idea what NAPFA is.

IT MEANS THEY ARE FEE ONLY AND DO NOT EARN A COMMISSION BASED ON SALES!

Also you basically need to be a CPA or CFA.

[jIM_Ohio]

Commission based on sales and commission based on 12b1 fees are "different", but still lead to biased recomendations.

[RedHotLama]

Commission based on sales and commission based on 12b1 fees are "different", but still lead to biased recomendations.

Go look at the NAPFA, they cannot make a commission from the security they sell.

Funds can still charge fees.