Questions to ask a Financial Planner

What questions do you need to ask to a financial planner?

Nick Cann, director at the Institute of Financial Planning, believes there are several questions you should ask before choosing your financial planner.

Choosing a financial planner is a decision that should not be taken lightly as it will almost certainly affect your financial future.
It is important to ask a series of questions to ensure you find the most competent, trustworthy and qualified professional.
Think of interviewing a potential planner is similar to interviewing a person who is applying for a job you’ve posted. In a way, they are – they want to be your personal money manager!

1. What are your qualifications?

This should be a straightforward task but the myriad of different professional qualifications that exist for financial advisers and planners in the UK can make it a little more complex. Financial planning is a detailed, comprehensive process and requires an individual who has proven experience and skill in the planning process itself.

Make sure you have a good understanding of the planner’s qualifications and if, in fact, they are a qualified planner. As such, check if they hold any advanced level professional credentials, such as the internationally recognised CERTIFIED FINANCIAL PLANNERCM certification – the global standard of excellence in Financial Planning. 

2. What experience do you have?

Experience is an important consideration in choosing any professional so don’t hesitate to ask how long the planner has been in practice, the firms they have been associated with and how this experience relates to their current practice. Choose a financial planner who has at least two years experience in working directly with individuals and planning their financial needs.

3. What services do you offer?

The services a financial planner offers will vary and depend on their credentials, areas of expertise and the firm for which they work.  Some planners offer financial planning advice on a range of topics but do not sell financial products, while others provide advice in specific areas such as taxation. Those who sell financial products, or who give investment advice, must be authorised and registered with the Financial Services Authority.

4. What is your approach to financial planning?

The types of services a financial planner will provide will vary. Some planners prefer to develop detailed financial plans encompassing all of a client's financial goals. Others choose to work in specific areas such as taxation, estate planning, insurance and investments. Ask whether the individual deals only with clients with specific net worth and income levels, and whether the planner will help you implement the plan they develop or refer you to others who will do so. If you’re keen to deal with a firm which puts real Financial Planning service at the heart of its service to clients, check out the IFP’s  Accredited Financial Planning Firms register.

5. Will you be the only person working with me?

It is quite common for a financial planner to work with their team to provide the full Financial Planning service to you. You may want to meet everyone who will be working with you and this will often involve Paraplanners. These are professionals who work to support the Financial Planner, providing  technical research and backup as well as report writing and analysis. 

6. How will I pay for your services? 

There is no such thing as free financial advice. Your planner should disclose the cost of their services in writing as well as how they will charge you for the services they will provide. 

7. How much do you typically charge?

Although the amount you pay the planner depends on your particular needs, the financial planner should be able to provide you with an estimate of costs based on the work they will be carrying out for you. 

8. Are you ready for the RDR?

From January 2013 a new set of regulations comes into force, set by the FSA. Amongst other changes, this includes higher professional qualifications and changes to the way that planners and advisers are paid. Ask the planner whether they are ready for the RDR and if they have their Statement of Professional Standing.

9. How are you regulated?

Financial planners who sell financial products such as investments must be regulated by the Financial Conduct Authority (FCA). From January 2013 all retail investment advisers must have a Statement of Professional Standing(SPS) from an FCA accredited body such as IFP. Check that your adviser or planner has got an SPS. It’s also a fair question to ask if they have ever been the subject of disciplinary action by any regulatory body or professional association.

10. Can I have it in writing?

And finally, be sure to ask the planner to provide you with a written agreement that details the services that will be provided.