How to Interview a Financial Advisor

Do You Know What You Should Ask Before You Choose A Financial Advisor?
You’ve probably realized that you may need some help and good advice with your money. And, let me tell you that knowing how to select a financial advisor can be more important as the decision to use one! Because…


You see, if a financial advisor is not really on the ball, or, has more to gain than you do, or is looking out for their own best interests instead of yours… LOOK OUT!

I’d like to give you a couple of examples of real situations, to see what I mean:


Hannah was a very frugal woman. When her daughter and son-in-law, wanted to take a look at her situation, they felt really helpless. They had thought about talking to the advisor who had “taken care” of her in the past, but were skeptical that he could be of any help. Especially since her current state of affairs was partially a result of his “help.”

Hannah had just turned 80, and was the picture of health. When she came into the office, she led her kids in too. She was very positive and optimistic about life. I admired her toughness.

And she needed to be tough, because she was broke. Real broke!

Her husband had died when she was 60, and she kept working at the railroad until she was 66. Finally, after all her hard work, and saving, she was able to retire.

The combination from Social Security and her pension of $890 per month of income was not great, but it was OK. She had also received $50,000 from her husband Mark’s life insurance. It seemed like enough, especially with the house paid for.

Until the repairs for the roof, the garage, the driveway and so on, ate up most of her nest egg. Not to mention the “bailouts” she lovingly suffered from for several of her kids. And the increase in medical costs. And the increase in the costs of everything!

Now, she faces life with $5,678 in the bank, and an old insurance policy with $2,000 of cash value. Her monthly expenses are $500-700 per month, without doing anything like visiting relatives or buying birthday gifts for the grandchildren.

And she wants to know if anyone can help.

I’ll tell you, other than some budget help, there isn’t much anyone can do. The financial path she was running on with no map in her hand led her into a dead-end!

Believe me, this kind of story can break your heart. It’s apparent that she will be out of money soon, and probably end up with her kids. (The thought of an independent woman like her forced to depend on “charity” is very sad.)


With Mark’s and Hannah’s pension plans, Social Security and the advice they received from their “financial planner”, they thought they had it made. Unfortunately, the advice they received was not based upon a plan, but rather based upon a product that could “solve their problems.”


Instead of first diagnosing every situation in Hanna’s life that came up, and helping her weigh all the options to avoid making costly mistakes, this planner did just the opposite! There was no “diagnosis”, no “options to weigh” and no strategic financial planning that could have saved her from such a pitiful state of affairs!

Instead, she got “product pitches” and suckered into a lot of bad financial decisions that were good for lining the planner’s pockets, but certainly not hers!

Have you ever known anyone who has gone through a similar problem? Maybe a friend or family member? Can you see yourself in this situation either today or sometime in the future?

Please take note! YOU are responsible for your financial future. YOU must take the steps necessary to assure yourself of a financial future that is far better than the one just reviewed!


Linda and Dennis had to figure out what to do with Dennis’ distribution from his company’s retirement plan he was getting in a month or so. They had basically been financially stable for many years, and had to deal with this sudden change in their life.

He used to be a sales manager at a national firm, until he fell victim to rampant down-sizing. Linda is an executive secretary. They are both 54, and live in a nice home in the suburbs.

Now that Dennis is leaving work, they wanted to know two major things. One, what to do with the distribution. And, second, were they on track with the retirement scenario they had been working on together for several years?

You see, when they first decided to get help with their planning, they had all the concerns a typical American family has these days:

  • Tax Planning
  • Education Funding
  • Cash Flow
  • Investment Choices and Diversification
  • Company Benefits
  • Risk Management
  • Retirement Planning
  • Estate Planning

Just like all of us, these areas must be set up right, to give a family the best chance possible to get wherever they want to go!

Anyway, Linda and Dennis had set up goals years ago, and by planning, they have always been right on top of the situation.

And now, when this bombshell at work hit, they found out some interesting things like:

Even with all the money they had already paid for college costs, they had enough set aside for their youngest daughter. And, they would not have to use any of their lump sum distribution to fund the remaining school expenses! And better yet, they don’t have to worry about Dennis’s job loss because:

                    They Can Retire NOW... All The Planning They Had Done Paid Off!

If Dennis doesn’t want to get another job, he won’t have to! Linda can quit whenever she chooses! Is that great or what?

As a matter of fact, Dennis always wanted to own a little fishing shop, (his passion) and now he was finally going to do it. Good for him!

It’s amazing to several of their friends and relatives that the two of them are so well set financially, when they were always just “regular people.” Not millionaires or anything, just hard working folks.

“How did they do it?” is the constant question from their acquaintances.

I know, and it had nothing to do with luck or “hitting the jackpot.”

It had everything to do with planning and getting the right help!

You see, the right coach is trained to coordinate and tie all these areas together. To work hard with families like Linda and Dennis to assure that they are always on target to reach their goals.

As you can see, there’s a lot of stuff to know.

The average person could not keep up with the tax law changes and investment opportunities alone! As with most complicated things in life like medicine or law, you need HELP!


Once you realize that you can’t do it alone, how do you obtain the services of a trained professional to assist you? Is there a way to separate the unbiased objective financial advisors, coaches and counselors from the product pushers?



Get References from a Financial Advisor

Ask for 5 references. 3 references should be current clients, and 2 references should be other professionals like an accountant or banker. There are three reasons for the professional references. First, any person in business should have at least 3 satisfied clients they can provide you with, therefore, client references alone may not be enough.

Secondly, if a planner cannot produce 2 other professionals that will attest to his ability as a financial planner, he may not be respected by his peers. And last, outside professionals in the community see all kinds of things, and will usually be aware of what kind of advice is available, and what kind of quality is provided by different folks.

Call the references you receive. Many people ask for references, but never use them! Call all 5 people. You can never learn too much about the person you are considering help you with your major financial decisions. Take the few minutes to talk to these people. It will be worth it!
Ask if they charge fees for their service. No one works for free! If they are not charging fees, they must be making money from the sale of products. If they are making 100% of their income from product sales, they must sell enough to make up for the people who did not buy. If there is a price to be paid, it must be paid by either the planner or you. Which one do you think it will be?

If they do not charge fees, ask them how you can be sure that the advice they will provide is in your best interests. Make them tell you how they analyze a situation, what process they go through to arrive at recommendations, what value-added services they provide and how interactive they will be with you.

What you want to hear, is that they first find out how you feel about your money and finances. Then, they will get a detailed understanding of your income, assets, debts, company benefits, etc. Finally, they will work up an action plan that addresses all of your concerns, and gives you choices. Choices of the different ways your concerns can be handled, with the pros and cons of each choice.

Then, and only then, will you be able to choose for yourself which way to go.

This process allows you the ability to make decisions from an educated basis, instead of from salesmanship. There is nothing wrong with being sold financial products, as long as they fit your needs, and not those of the salespeople!

Ask How the Financial Advisor Gets Paid

Ask if they sell products as well as provide financial planning advice. If the planner says “yes”, this should not be taken as a negative response. However, you should recognize the potential conflict of interest that exists. Although I have known several financial planners and advisors that did not let the conflict of interest influence their recommendations, those planners were a small minority. Therefore, extra caution should be exercised if the planner also sells the products he recommends.

You must ask the planner if he has any special incentives or reasons to sell you the things he is proposing. If the motivation is to get you what you need, that is fine! If you sense from the answer that there is some hidden reason, you need to move carefully.

If the planner sells products, ask if the products can be obtained if no plan is prepared. Buying financial products without a plan, is like having surgery without an exam. Call me crazy, but I sure wouldn’t want a doctor to operate on me until he knew what was wrong with me. A doctor who performs surgery without an exam would be an idiot!

The same holds true for a financial planner who sells product without an analysis. If you take away the planning process, you are left with nothing more than a product salesman. Do not let yourself be deceived!

Now, a plan may be many things. It can be a short one pager, all the way up to a thick set of charts and graphs. And, one is not necessarily better than the other. It just depends on how detailed your needs are. Even if the written plan is short, the interview process must not be.

Garbage In: Garbage Out!

The best planning we have seen is not due to the actual written area, but because of the depth of the interview. The planner must ask about all your issues. Not just the ones he can make money on. For example, they should ask about your taxes, education funding, home financing, company benefits, insurance, estate planning, retirement goals, investments, etc.

A good planner knows how to get to know you, your goals, and your fears. If you truly feel he understands your emotions, as well as your finances, then you are with a real planner!

If the planner sells products, tell the planner you would be more comfortable implementing their strategies with someone else. Note whether the planner starts to squirm at the thought of you buying elsewhere.

If the planner tries to convince you that no one can implement their strategies as well as he/she can, tell the planner that you will consider that fact after the plan is completed. If they have faith in their own ability, the relationship will most likely continue. Otherwise, you have probably taken the first step towards being told that you are not a suitable client for their service.

If there is a fee, do not pay more than 50% of the fee in advance. Although a retainer is often requested, most professionals do not require 100% of their fee in advance. Paying the balance upon completion of the plan, assures you that the job will be finished to your satisfaction.
Ask about the planner’s financial background. As a rule of thumb, if you have significant wealth, consider only planners that have been providing financial services for at least 5 to 10 years. (Or whatever time period you choose.) Although there may be some very good planners with less experience, why take the chance. I was once an inexperienced planner, and when I was, I got my experience working with people who were also just starting out. Select an advisor that has more financial experience than you do.

Receive a 100% guarantee of unconditional satisfaction. If they are so sure they can help you, they should back up that promise with an iron-clad guarantee. The benefits you receive must exceed the cost of the planning.

You are the only person that can determine the amount of help you have received. And, the benefit received can’t be determined until the plan has been completed. There should be no question in your mind that you have received more benefit than cost. If not, then the fee should be adjusted. If the planner thinks he/she can provide sufficient benefit to you to justify the cost, let them say so in writing.

Ask them how they keep up on the constantly changing financial environment. Do they get research from their parent company? Do they attend workshops or go to classes? Are they studying for an advanced degree? Do they subscribe to financial publications other than general media? (Reading trade journals, as opposed to “Newsweek” or “The Wall Street Journal.”)

Let me assure you this is an important question. there is no way on Earth anyone can be excellent at planning unless they are excellent at obtaining up to date, accurate information!

Who Does the Financial Advisor Consult?

Which outside professionals do they bring in on cases, and when do they bring them in?

No one person can know everything about money. It is impossible. Therefore, a good planner will have one or more outside professionals they work with, such as attorneys, accountants, pension experts, mortgage brokers, and so on.

A planner who says that he “handles everything” is fine. Just make sure that he brings in outside advisors when the need arises. (And believe me, it arises every day!)

Anyone who does not have relationships with these other folks, is not going to be able to get you the best answers in a timely fashion. Someone who works with these specialists, will always know when they are in over their head in an area, and get you the right help. This is the mark of a smart planner.

I know that these are sometimes hard questions to ask, because you may feel you are going to be insulting the person.


I’m talking about your money here.

Being shy has no place in this process. If you feel too embarrassed to ask the questions yourself, have a trusted friend or relative ask for you. Whatever way you get this quizzing done, just be sure to GET THE QUESTIONS ASKED AND ANSWERED!!

Why am I so insistent about this? Because getting the right help is so important! For example, did you know the government tells us that:


(Source- Social Security Administration)

Why is this the case? Possibly because most people spend more time planning their vacations and evenings out, then they do planning their family finances!

Vacations, for example, are planned very carefully.

When will you leave? What do you need to do before you go? What will you bring with you? How will you get to the airport? What will you do when you get there? How will you get to the hotel and around town? Where you will eat? And so on.

Are you that detailed with your personal finances? Be honest now. Do you really take the time to plan for your own future in such lavish detail?


I understand! Raising a family can be as much a full time job as “work” itself! There is little time left to study tax laws and other financial information. Therefore, the job of planning your finances is often delayed until a “more convenient” time.

However, you must plan for the future today, because the future will become the present, whether you plan for it or not.

Remember, people do not plan to fail, they just fail to plan!


  • Wasting Thousands of Dollars in Overpaid Income Taxes!
  • Earning an After-Tax Rate Of Return That Is Lower Than Inflation!
  • Limited Choice of Colleges Due to Lack of Enough Money!
  • Suffering a Lower Standard Of Living At Retirement!
  • Losing as much as 50% of Your Estate to Estate Taxes!
  • Not Achieving Your Financial Goals!


Take any one hundred people at the start of their working careers and ask them how many believe they will be financially independent. I would be surprised if even one person answered “Not Me!”

However, 40 years later, according to the Social Security Administration, one will be wealthy, five will be financially secure, five will continue working, 36 will be dead and 54 will be dependent upon their meager social security checks, relatives, friends or even charity for a minimum standard of living.

Planning is the major difference between the 6% that were successful and the 94% that failed to accomplish their objectives.

Don’t get me wrong. I am not saying that planning will make everything perfect. That would be a ridiculous statement to make. However, after more than ten years of experience, I can tell you that planning will significantly improve the possibility.


It would be difficult to find one thriving business that does as little planning as the average family! If you find one, they are very lucky. Do you want to rely on luck for your future? If so, the lottery awaits you. If not, financial planning awaits you!

What I’m talking about here is setting goals. Executing a plan to reach your objectives. And monitoring your progress, making any necessary adjustments on a timely basis!


The traditional random method of buying financial products from salespeople is basically history. A salesperson who does not take the time to help you create a plan before selling you products is NOT DOING YOU ANY FAVORS!

Imagine the following:

You go to the doctor with a stomach ache. The nurse takes you to a room and talks to you about your symptoms. The nurse leaves, and returns a short time later with a prescription for a drug signed by the doctor. You are amazed about two things!

One, the doctor prescribed the medication without even performing a diagnosis, and two, the doctor prescribed the same medicine for your wife’s sunburn last week! How could two totally unrelated health problems have the same cure?

Imagine your surprise when you find out that your nephew went to this same doctor for asthma, and received the same medicine! If you didn’t know better, you might think that this doctor was benefiting somehow from “pushing” this prescription. Could you ever contemplate a doctor doing this? If they did, they would be kicked out of the business so fast that their head would spin!

Many financial salespeople do this on a daily basis. No matter what the financial problem is, everyone gets the same product! Whether you know it or not, this may have happened to you, more than once!!


The only way to be sure you receive a plan is to work with a professional who will provide you with a complete examination before recommending any solutions for your problems! An advisor that recognizes the need for a thorough analysis of your situation.

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