Warren Buffet, Bill Gates and Larry Page, quite an impressive trio of billionaires but there is something more subtle about them. In an interview published on U.S Money, the three stated that their journey to success not only based on their wisdom but that of others.
In short, they used professional financial advisors all the way and they still use them today. Well, you can’t argue with these successful billionaires because a study by Entrepreneurs Organization (EO) on Forbes Richest Top 500 indicates over 98% use these financial experts to chart a path to success.
Invaluable Questions to Pose a Financial Advisor
Now that you appreciate the need for these professionals in your life, how do you pick the best in a crowded field? Here are some questions to use as a yardstick:
1. How long have you practiced?
The best person to manage your financial life must have practiced in the industry for years. Such exposure prepares them to handle any kind of situation and provide innovative solutions to ensure your finances are always in good health.
2. Which services do you offer?
A reliable advisor must have expertise in different areas. This question is crucial and its answer will reveal the advisor’s viability. For instance, if you need tax advice then look for an expert who has handled this sector for years. On the other hand, if you want financial planning advice lookout for an expert with years of experience in the field.
3. What is your educational background?
Educational and professional background is the critical factor when choosing your financial expert. Indeed, the Financial Industry Regulatory Agency (FINRA) posits that this should be the first question you ask whether on call or during initial consultations.
Common certifications and licensing include Certified financial planner (CFP), Chartered Financial Consultant (ChFC), certified public accountant (CPA), personal financial specialist (PSF) certification among others.
4. Do you offer any references?
Experts in any field like to show off their prowess through work done previously. As such, any credible financial planner should be ready to show its portfolio and even allow you to contact some of these clients. The best way to hire any of these experts is by looking at what they have done so far and getting a second opinion that counts from past clients.
5. How do you get paid?
This is the toughest question as well as a weighty one. If you are not Bill Gates, you definitely don’t have a lot of money lying around to pay exorbitantly for financial advice. This means you need an affordable advisor. There are four ways that these advisors get paid: fee-only, fee with commission, fee-offset and commissions only.
Fee only means you pay a contractual fee but in the case of commissions, you will agree on a certain percentage of assets managed. Whatever the arrangement, make sure it is well indicated in your contract and ask as many questions regarding the way this structure works.
6. Are you legally bound to act for me?
This presents another question whose answer you should keenly listen to. This is a legal principle and you should have it in writing in case this expert messes up things along the way or acts unscrupulously.
When you have a toothache, you go to a doctor and when your car is acting weird; your mechanic comes in handy. This same maxim must apply to your finances by letting an expert handle what they know best.
Well, at the end of the day you must take time to research in order to make the best pick, never rush this process. More crucially, make sure you have an idea of where you want your finances to head in the next few years.