5 Questions a Financial Planner should ask YOU

From Jacoba Urist at Today.com –



1. What is it you hope to accomplish by visiting a financial planner?

2. What is your current income and do you expect any changes to it?

3. Do you have a formalized household budget?

4. How involved would you like to be in the process?

5. Do you understand and feel comfortable with the fees you will pay for my services?

These are all good questions and some of them should be pondered somewhat before calling the financial planner in the first place (particularly with respect to goals, budgets, income).  A good planner will ask about all that — and help you figure out the answer – narrow it down, prioritize, etc.  The last two, however, are both planner and client dependent – different planners work with different clients in different ways.  Some clients are interested in getting some feedback on what they are doing but are fundamentally do-it-yourself-ers.  Some want more detailed plans and guidance but are still comfortable executing parts of the plan (from shopping for and buying insurance to opening accounts, moving money and making trades, to dealing with estate attorneys, their employee benefits packages, etc).  And finally some want the planner to really manage their entire family financial picture – some wealth management and trust company firms go so far as to receive their clients every day bills and pay them.

Not all financial planners offer all those services.  Some will do simple consulting – mainly meetings – some will focus almost exclusively on asset management (investing a portfolio for you) – and some are full-service with hand-holding for everything.  No matter which way you go, bear in mind that none of these services are free.  One unfortunate issue is that it’s not always clear when or how one is paying for certain services.  If you aren’t getting a bill, you’re still paying – and you should know exactly how and where.

One more thing – while I’m not a stickler for a budget, I do expect clients to spend some time getting a handle on their spending.  Most folks know how big their mortgage payment is, perhaps some larger categories of monthly spending, but if they aren’t tracking all their spending in Quicken or Mint or similar, while they may not need a formal budget, they should take a month or two of bills and really walk through them and see how much they are spending.  People are regularly surprised at how much, for example, they spend on dining – because it goes in bits and pieces all month long.  And they also forget, when working up a monthly spending estimate, the less frequent expenses such as once-per-year ones like car insurance.  If you don’t know something about your spending, I certainly can’t.

Great article, great questions.

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