First, is the consultant experienced? Ask about how many years he has been in business, what has been the nature of his practice and the types of problems he has solved, his existing clients, and the breadth and depth of experience. You may not think your issues are complex, but you are likely not aware of some of the strategies that could benefit you most, nor are they be understood by a novice. For example, it may take years of apprenticing to be ready to address the myriad issues facing seniors, so don’t be someone’s guinea pig. This is especially true in the area of tax and estate planning, where many novices present public seminars with only a basic understanding of complex issues.
Second, what credentials does you consultant hold? You should be looking for legitimate and recognized credentials. Common credentials include: ChFC, CFP, CPA, CLU, JD, or other genuine designations. An advisor with only a CSA (Certified Senior Advisor) designation should be avoided. Designations such as this only require a quickie course and minimal knowledge of real financial principles.
Third, has the advisor shown a true commitment to ethical behavior? The advisor should hold a membership in a least one financial industry association that requires a code of ethics. Such associates as NAIFA, Society of Financial Service Professionals, IBCFP, FPA, etc enforce ethical behavior. You should also beware of advisors that use their affiliation with trusted organizations as the sole basis for their ethical behavior (churches, community centers, etc.)
Fourth, is there a commitment to continuing education? Complex laws are ever-changing and the economy never holds still. How many hours are spent each year keeping skills sharp? Are the continuing education hours at a beginning, intermediate, or advanced level?
Fifth, does the advisor handle the services you need? Consider whether you need comprehensive financial planning, tax planning, or investment advice. Will you need help with securities, or simply need someone to give tax advice? Is the planner simply an insurance salesman? Find the consultant that specializes in the services that you need.
Sixth, is your advisor a solo-practitioner? Or is your advisor part of a team that he can turn to for strategizing on complex issues? Or to bring an additional perspective? Is his firm large enough to provide the extensive resources as a large firm of pros?
Seventh, what’s the average client like? If your net worth is $500,000, and your advisor primarily deals with people with a net worth of $3-10 million, will you get the attention you need? Are there other advisors in the office that would give you better attention while still benefiting from the firm’s resources? Does the advisor primarily work with senior citizens, professionals, business-owners, or whom? Will your unique needs be addressed?
Eighth, how is the planner compensated? Are they paid by commission, fee only, or a combination of the two?
Finally, is your planner a professional? Be careful of planners that are running their operation out of the back of their car, lack memberships or designations, only work part-time, or mock those that commit to high standards. These advisors are often smooth talkers that will downplay the importance of the attributes that they lack. These individuals may be charming and present
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