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Five Important Things You Should Ask Your Wealth Advisor

Finding the right fit is important when selecting a wealth advisor to help guide you. Do they understand you and treat you in a manner that you are comfortable with? Much like a doctor/patient relationship, you will be sharing many personal details about your life for the planner to be able to appropriately diagnose your situation and offer you advice on how to improve your overall financial health.

Having that rapport is very important. But, just as you look at your doctor’s credentials and expertise, you should scrutinize your wealth advisor in the same way. The backgrounds of wealth advisors can vary as much as the services offered. The planner’s education and experience should demonstrate a solid foundation in financial planning and a commitment to keeping current.

When you are considering engaging an advisor for financial planning purposes, there are five key questions you should be asking:

What is your educational background?

You want to find an advisor who has the education to back up the advice they are giving. In addition to post-secondary educational degrees, you should also ask if they have any advisor certifications or designations. There are four primary ones to look for:

  • Certified Financial Planner™ (CFP®) – to earn this designation, the advisor is required to complete 18 to 24 months of study, pass a rigorous ten-hour exam and work for a minimum of three years as a wealth advisor or complete a two-year apprenticeship with a CFP professional before earning the designation.
  • Chartered Financial Analyst (CFA) – to earn this designation, the advisor must pass three six-hour exams and have four years of qualifying work experience to earn the title.
  • Chartered Financial Consultant (ChFC) – to earn this designation, advisors take nine courses, two of which are application-based and take an exam after each course. In addition, advisors must have at least three years of experience in the finance industry before they can earn this credential.
  • Certified Public Accountant (CPA) – this person has completed a post-secondary degree in accounting and has passed a state certification board examination. Advisors who have earned the CPA credential should have a solid understanding of how to craft tax-efficient financial plans that will benefit you over the years.

How long have you been offering financial planning services?

As you can see from the certifications above, experience in the industry matters. If you find a planner who is just getting started, make sure he or she has an experienced staff to help coach and guide them, similar to an intern or resident needing a licensed physician to be monitoring the care and advice they are giving.

What continuing education in financial planning do you pursue?

You want to make sure your advisor is keeping up to date on the ever-changing laws and regulations around investment management, financial planning, estate planning, taxes, and insurance. For example, to maintain a CFP® designation, an advisor must complete at least 30 hours of continuing education every two years.

Are you a member of any professional financial planning associations?

These peer groups offer many resources to advisors, including continuing education courses and other educational materials. Three nationally known associations are: Financial Planning Association (FPA), National Association of Personal Financial Advisors (NAPFA) and the Society of Financial Service Professionals (SFSP).

What would our first year together look like and what is your process for developing, implementing, and monitoring my financial plan?

You want to make sure your advisor has a process for the first year and beyond. If they can’t give you a clear picture of what the first year will look like, they might not have a process in place and may just be trying to “win” the business and move on. An advisor should be able to articulate a compelling process for how a new client is onboarded and how the process will continue beyond just signing paperwork.

BerganKDV has a team of wealth advisors who can help you navigate all areas of your financial life as you prepare for, enter into and live in retirement. Want to learn more about what we can do for you? Start here.

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The views and strategies described may not be suitable for all investors. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for accounting, legal or tax advice. References to future returns are not promises or even estimates of actual returns a client portfolio may achieve. Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation.

The views expressed are those of BerganKDV Wealth Management. They are subject to change at any time. These views do not necessarily reflect the opinions of any other firm. Investment advisory services and fee-based planning offered through BerganKDV Wealth Management, an SEC Registered Investment Advisor.

*Winners appearing on this page do not pay a fee to be considered or to win the Five Star Award. Professionals with a digital profile have paid a promotional fee.
The Five Star Wealth Manager award, administered by Crescendo Business Services, LLC (dba Five Star Professional), is based on 10 objective criteria. Eligibility criteria – required: 1. Credentialed as a registered investment adviser or a registered investment adviser representative; 2. Actively licensed as a registered investment adviser or as a principal of a registered investment adviser firm for a minimum of 5 years; 3. Favorable regulatory and complaint history review (As defined by Five Star Professional, the wealth manager has not; A. Been subject to a regulatory action that resulted in a license being suspended or revoked, or payment of a fine; B. Had more than a total of three settled or pending complaints filed against them and/or a total of five settled, pending, dismissed or denied complaints with any regulatory authority or Five Star Professional’s consumer complaint process. Unfavorable feedback may have been discovered through a check of complaints registered with a regulatory authority or complaints registered through Five Star Professional’s consumer complaint process; feedback may not be representative of any one clients’ experience; C. Individually contributed to a financial settlement of a customer complaint; D. Filed for personal bankruptcy within the past 11 years; E. Been terminated from a financial services firm within the past 11 years; F. Been convicted of a felony); 4. Fulfilled their firm review based on internal standards; 5. Accepting new clients. Evaluation criteria – considered: 6. One-year client retention rate; 7. Five-year client retention rate; 8. Non-institutional discretionary and/or non-discretionary client assets administered; 9. Number of client households served; 10. Education and professional designations. Wealth managers do not pay a fee to be considered or placed on the final list of Five Star Wealth Managers. Award does not evaluate quality of services provided to clients. Once awarded, wealth managers may purchase additional profile ad space or promotional products. The Five Star award is not indicative of the wealth manager’s future performance. Wealth managers may or may not use discretion in their practice and therefore may not manage their clients’ assets. The inclusion of a wealth manager on the Five Star Wealth Manager list should not be construed as an endorsement of the wealth manager by Five Star Professional or this publication. Working with a Five Star Wealth Manager or any wealth manager is no guarantee as to future investment success, nor is there any guarantee that the selected wealth managers will be awarded this accomplishment by Five Star Professional in the future. For more information on the Five Star award and the research/selection methodology, go to 3,606 Twin Cities-area wealth managers were considered for the award; 589 (16% of candidates) were named 2020 Five Star Wealth Managers. 2019: 3,504 considered, 671 winners; 2018: 2,622 considered, 591 winners; 2017: 2,304 considered, 836 winners; 2016: 2,083 considered, 854 winners; 2015: 2,673 considered, 825 winners; 2014: 1,931 considered, 844 winners; 2013: 2,151 considered, 863 winners; 2012: 1,256 considered, 624 winners.