Questions to ask

Regardless of what type of private wealth management firms you use, there are some questions that you definitely should use when deciding on how to go about getting the best financial planning help.

#6 How Much do You Charge for Your Services? A financial planner should be able to provide you with a reliable estimate of how much they would charge to provide you with planning services. The actual amount will depend on your particular needs.

#7 How are You Compensated for Your Services? In general, financial planners can be compensated in several different ways:

- The planner receives a salary from their company for their work. You pay the company fees based on the size of your account, or they earn commissions based on account activity.

- They receive a fee from their clients, either a flat rate, or a rate based on a percentage of your assets or income.

- They receive commission payments from third parties based on products sold to you in the course of the financial planning engagement.

- A combination of fees and commissions, where a fee is charged based on the amount of work the financial planner does, and commissions based on the financial products you purchase.

#8 Does Anyone Else Benefit From Your Planning Advice? There are situations where a financial planner’s other business relationships or partnerships could affect their personal judgment with respect to your account, or otherwise act as a disincentive for the planner to act in your best interest.

For example, if your planner has a relationship with other companies whereby the planner receives a financial benefit by selling their mutual funds or insurance policies.

#9 Have You Ever Been Disciplined for Unethical or Unlawful Behavior? This question shouldn’t come as a shock to a prospective financial planner, nor should it be considered critical or insulting. You can also check with the various supervisory entities that govern the behavior of individuals in the financial services industry, including the Boards of the various credentialing entities listed above.

#10 Can We Have the Scope of Our Relationship in Writing? At a minimum, the Agreement should set forth exactly how the financial planner will be compensated, whether they will act as a fiduciary with respect to your account, and whether there are any actual or potential conflicts of interest with their other professional activities.

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Posted by Jay McGrath | Leave a comment