How to Interview a Financial Planner

by Jeff Rose, CPA

You have come to that point in your life where you have realized that you cannot do it alone. That you need to plan for retirement, but you just don’t quite get it, so you need to find and hire the right financial advisor to help you along the way. Whenever you actually sit down and meet with that person, here are some general guidelines and questions you can ask that person to find out if he or she is the right fit for you.

1. Are you certified?

What I mean by that is finding out if that person is a Certified Financial Planner™. I don’t know the exact number, but there are approximately between 800,000 and 900,000 supposed financial advisors in the country. Of that, there are only approximately 61,000 who are CFPs or Certified Financial Planner™ professionals.

How do you know if that person is a CFP®? One really quick way to find out is if he or she has the credentials on his or her business card. Having “CFP®” after the name is a pretty good sign that he or she is certified. Another way to find out is to go to and do a quick name search to see if that person comes up. The CFP® designation is one of the most recognized designations in our industry, and for those that have taken the time and extra effort to get that, it just says a lot about his or her commitment to the financial planning process.

Find out what it takes to become a Certified Financial Planner™.

2. How do you get paid?

There are many, many different combinations of this. It is just important to understand the way that you are going to be paying for that person’s services. One method is called commission, and that is kind of like the brokers of old where they sell and buy stocks for you and they get paid a commission from it. The obvious question here is if he or she is getting paid a commission for selling you an investment product, does he or she really have your best interest at heart? I am not saying that every commissioned advisor our there is bad. It is just something of which you need to understand the process.

Other forms of getting paid are fee only where that person may be getting paid just for his or her work per hour. Maybe you pay him or her for 5 hours of producing a financial plan for you. That way you know the rate that you will be paying him or her per hour, so you know up front exactly how much you will be paying.

Another form could be (this is also fee only or fee based) where you are paying a percentage of the assets that the advisor is managing for you. For example, let’s say that you have a sizable 401K that you rolled over to that advisor and he or she is collecting 1% on those assets; that is how he or she gets paid. You are paying him or her a percentage of whatever he or she manages. You also want to make sure that that is clear and that you understand that that is the only thing you are paying for. In some cases there could be underlying fees associated with that. You want to make sure you understand from the get go how much you are actually paying for his or her services.

3. What is your investment philosophy?

how to interview a financial planner

Are your investment philosophies similar?

What I mean by that is is this person an active trader or is he or she a buy and hold? Does he or she believe in active or passive management? It is important to know this especially if you have a certain investment philosophy yourself because you just want to make sure that his or her investment philosophy matches yours.

For example, if you are completely into indexing and completely passive investing and yet you are hiring a manager who is doing more active management, even though he or she might be more than qualified to manage your finances or do your financial planning, the investment philosophies might not mesh. If you don’t see eye to eye that might cause strain on the relationship going forward.

You just want to understand up front what his or her investment philosophy is. If he or she can also show you some model portfolios that maybe he or she has used for current existing clients, you can kind of get a sense of what he or she is investing into and how he or she invests.

4. Who is behind the scenes?

What I mean by this is does the advisor work for a completely independent firm? Or are they represented by a brokerage firm or an insurance company? By asking this question, hopefully you will be able to find out if he or she is able to offer unbiased investment advice or if he or she works for an outfit that is pushing certain investment products to you.

Most likely if he or she is only able to sell his or her own products, then that advisor might not have your best interests at heart. It is important to understand what conflicts of interest that may exist. If he or she has the best investment product known to man (if you find this be sure to let me know), then maybe that is ok. You just need to understand where he or she is coming from and make sure there is no outside influence on any recommendations he or she has for you.

5. How often do I expect to hear from you?

What you can find out here is how many clients this advisor is servicing. If he or she is trying to service between 500 to 1000 clients and you are number 1001, how much service can you expect to get? Maybe they have a good system and team in place where they can service that many clients. If that is the case, then so be it, but you just need to find out where you fit in that advisor’s business plan. More importantly, you want to know how much attention you are going to get compared to everybody else. There’s not much worse that feeling that you aren’t important.

6. Has anyone filed a complaint against you?

Finally, the last thing that you are going to want to find out is if there any skeletons in that advisor’s closet. What I mean by that is I read this report where only one-third of all clients will do a background check on their potential financial advisor. So more than two-thirds do no background check whatsoever on that person who is getting ready to handle their retirement and investing. That just amazed me! You are completely turning that over to this stranger and not doing any background check on them?!?! That stat that I just shared with you was right about the time the Bernie Madoff Scandal went down, so I would like to be optimistic and think that that number has changed or improved since then, but my hunch is that most likely it has probably stayed the same. In the event that you are getting ready to hire someone, it never hurts to do a quick background check on him or her. It is free. It is easy. You can do it in less than 5 minutes. Here’s how:

The first site you want to go to if he or she is a registered representative is and do a user broker check function to find out if there are any reports against him or her for wrongdoings. If he or she is an investment advisor, you can go to and do a quick background check to see if there are any wrongdoings there. Finally, if he or she is a Certified Financial Planner™ professional, you can go to and do a quick search to see if there is any complaints filed there. You can also find out if the advisor has filed bankruptcy or has been charged with any other crimes. These sites, like I said, are all free. It is an easy check. It takes you literally less than 5 minutes to do it all. You can find anything there you need to know about that potential advisor.

If you are heading out and going to meet with that financial planner for the first time, I wish you the best. Take a notepad with you to ask questions. If that question you ask brings on more questions, then ask them because you want to make sure that you walk out of there with a clear, concise understanding of the whole process: how it all works, how the advisor is going to get paid, how they are going to service you, and how he or she is going to take care of your money. Good luck!

Image credit: s_falkow

Published or updated October 5, 2012.
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{ 2 comments… read them below or add one }

1 Briana @ GBR

I’m looking to become a Certified Financial Planner this year, so it’s good that I know what kind of questions to prepare for when I start.


2 Jacob @ My Personal Finance Journey

These are great questions to bring up! I especially think that it is important to find a financial planner that is not paid via commission. I feel that will not align you and his/her interests!


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