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Questions to ask a financial professional . . . |
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1. What experience do you have? (back to questions)
Find out how long the professional has been in practice and the number and types
of companies with which he has been associated. Ask him to briefly describe his/
her work experience and how it relates to his current practice. Choose a financial
professional who has experience counseling individuals on topics specific to your
financial needs.
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2. What are your qualifications? (back to questions)
Ask the professional what qualifies him/her to offer financial advice. Look for a
professional who has proven experience in financial topics such as insurance, tax
planning, investments, estate planning or retirement planning. Determine what
steps the professional takes to stay current with changes and developments in the
financial field. If the professional holds a financial planning designation or
certification, check on his background with FINRA (www.finra.org) or other relevant
professional organizations. |
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3. What services do you offer? (back to questions)
The services a financial professional offers depend on a number of factors including
credentials, licenses and areas of expertise. Generally, financial professionals
cannot sell insurance or securities products such as mutual funds or stocks without
the proper licenses, or give investment advice unless registered with state or
Federal authorities. Some professionals offer financial planning advice on a range
of topics but do not sell financial products. Others may provide advice only in
specific areas such as estate planning or tax matters.
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4. What is your approach to financial planning? (back to questions)
Ask the financial professional about the type of clients and financial situations he/
she typically likes to work with. Some professionals prefer to develop one plan by
bringing together all of your financial goals. Others provide advice on specific
areas, as needed. Make sure the professional's viewpoint on investing is not too
cautious or overly aggressive for you. Some professionals require you to have a
certain net worth before offering services. Find out if the professional will carry
out the financial recommendations developed for you or refer you to others who
will do so.
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5. Will you be the only person working with me? (back to questions)
The financial professional may work with you himself or have others in the office
assist him. You may want to meet everyone who will be working with you. If
the professional works with others outside his own practice (such as attorneys,
insurance agents or tax specialists) to develop or carry out recommendations,
get a list of their names to check on their backgrounds.
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6. How will I pay for your services? (back to questions)
The financial professional should clearly tell you how he/she will be paid for the
services to be provided. The following are a few example:
- A salary paid by the company for which the professional works. The
professional's employer receives payment from you or others, either
in fees or commissions, in order to pay the professional's salary.
- Fees based on an hourly rate, a flat rate, or on a percentage of your
assets and/or income.
- Commissions paid by a third party from the products sold to you to carry
out the recommendations. Commissions are usually a percentage of
the amount you invest in a product.
- A combination of fees and commissions whereby fees are charged for the
amount of work done to develop financial recommendations and commissions
are received from any products sold. In addition, some professionals may
offset some portion of the fees you pay if they receive commissions for carrying
out their recommendations.
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