Interview with a Vampire: Questions You Should Ask Your Potential Financial Adviser

Recently a prospective client sent an e-mail with some questions he wanted answered before engaging a financial adviser.  I thought others might share these same questions, maybe about me or even other advisers they have. Here, with permission and a few edits, is a copy of our correspondence.


Q: I wanted to learn more about your commitment to Professional Standards.  Tell me more about your relationship with professional standards organizations.


A: I am a member of the Financial Planning Association and regulated by the Certified Financial Planner Board of Standards.  I serve on the Public Relations Committee for the FPA and have been a past board member.  I also participate regularly in their Pro-bono volunteer days. NAPFA is also a good group, but I don’t have time to be a good member in both organizations.


Q:  Are you acting as my fiduciary?  Will you sign an agreement stating that you are acting as my fiduciary at all times?


A:  I do act as a fiduciary for all clients.  This means that the advice I give you puts your wellbeing above my business profits.  I don’t have a current document that states this, but it is a part of my Certified Financial Planner ethics code.


Q:  Do you have a way to measure the value your clients receive in relationship to the fees paid?


A:  I do not have a way to measure client results and do not revise fees.


Q:  Do you have any affiliation with a broker-dealer? I saw some relationships in the ADV.


A:  I am not affiliated with a broker dealer.  I do subcontract work for other wealth managers (that’s what you saw in the ADV) and they have broker dealer relationships.  Those do not affect me and my business.


Q: Do you use a third-party custodian, such as Charles Schwab, TD Ameritrade of Fidelity to hold my assets?


A:  Clients custody assets wherever they wish.  I do not actively manage money, only suggest mutual funds or ETFs in which to invest.  Where the investments take place is up to the individual client.  I generally recommend using discount brokers such as Fidelity, Schwab, TD Ameritrade (soon to be Schwab), E*TRADE, or Vanguard.


Q:  Who is your ideal client?


A:  Someone who lives within their means naturally and is good at receiving advice.


Q: Do you get additional compensation or financial incentives for recommending certain investments or referring me to an insurance provide, attorney, CPA or other referral?


A: I am only compensated by clients directly at my hourly fee.  I get no compensation for referrals to people or investment/insurance products.


Q:  Will you be the only person working with me?


A:  Yes, I am a one-person firm.  That said, if I get hit by a bus, you will need to find someone new, so that may be a factor in your decision.


Q:  Do you have clients who might be willing to speak with me about your services?


A: Yes, but only after an initial consultation if you are considering engaging me in a larger project.  I do so many new client appointments that I cannot impose on past clients for referrals for all of them.


Q:  What counseling to you provide related to Social Security, Medicare, taxes, and estate planning?


A:  For Social Security, I use my software program to help determine the best time to take your benefit given your assets, spending, and other sources of income.  For Medicare, I refer out to trusted brokers for help with Medigap plans.  I am not compensated for the referral or your purchase, but the brokers are.  For taxes, I can help with advice as related to how taxes work in your various accounts.  I do not do income taxes.  Estate planning is also referred to attorneys, but I can give basic ideas on what is essential for you to have and what may be overkill on estate documents.


I hope this written interview helps you to know me better and can serve as a tool for other advisory relationships in your life.


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