How to Choose a Financial Planner: Questions to Ask Before You Hire Anyone

Anyone can call themselves a financial advisor. The titles "financial advisor" and "financial planner" aren't regulated, so the person across the table could be a seasoned planner or a salesperson with a weekend of training. Many people find an advisor through a friend or coworker and hope it works out.

You deserve better than hope. A few questions, asked in the first meeting, will tell you most of what you need to know. If you want the background on how advisors get paid, we covered it in What Are You Paying Your Financial Advisor For? This post is the checklist.

One caution before the list. We tend to hire the person who sounds the most confident, because confidence feels like competence. It isn't a reliable signal. How someone is paid, and what they're legally required to do for you, tell you far more.

Ask If They're a Fiduciary, and Ask for It in Writing

A fiduciary has a legal duty to put your interests ahead of their own. Registered investment advisers are fiduciaries, and Certified Financial Planner professionals have been required to act as fiduciaries when giving financial advice since 2019. Other advisors, such as some who work for brokerages, may be held to a different standard when they recommend products.

Ask directly, "Are you a fiduciary at all times, with every service you'd provide me?" A good advisor will answer without hedging and will put it in the client agreement.

Ask How They Get Paid, in Dollars

There are three basic models. Fee-only advisors are paid only by their clients, through hourly rates, flat or monthly fees, or a percentage of the assets they manage. Commission-based advisors are paid by the companies whose products they sell. Fee-based advisors sit in between. The name sounds a lot like fee-only, but they can charge fees and also earn commissions on products they sell.

A commission can create a conflict of interest, because the advisor earns more if you buy a particular product. Advisors have to disclose those conflicts, but you shouldn't have to dig for them. Ask for an estimate of what you'd pay in a year, in dollars, including the cost of any investments they recommend. Then ask what happens to your fee if you cancel.

Check Their Record Yourself

Don't rely on what an advisor tells you about their own background. Three free tools let you check. The SEC's Investment Adviser Public Disclosure site covers registered advisory firms and the people who work for them. FINRA's BrokerCheck covers brokers. The CFP Board has an online lookup for anyone who claims the CFP certification. Look for disciplinary history, past employers, and what the person is registered to sell.

Every registered advisory firm also files a Form ADV, and Part 2 is a plain-English brochure that describes its services, fees, and conflicts of interest. Ask for it. You can read ours here.

Find Out If They Plan or Just Invest

Some advisors mainly manage investments. Others build a full financial plan that covers cash flow, taxes, insurance, benefits, and goals, then invest to fit. Ask what your first year would look like. If the answer is mostly about your portfolio, ask where the rest of your financial life fits in. Real financial planning, not just investments, is what we do.

Ask About Minimums and Who They Serve

Many firms set investment minimums, which quietly screens out anyone who is early in building savings. Ask whether there's a minimum and what happens if you don't meet it.

Ask who their typical client is, too. A planner who works with teachers and nonprofit staff every day will understand a 403(b) or a public service loan forgiveness question faster than one who mostly serves executives. If it matters to you, ask how they approach investing that fits your values.

Ask What Working Together Looks Like

How often will you meet? Who answers when you have a question between meetings? Who covers if your advisor is out? Do you work with one person or a team? How do they protect your personal data? None of this is exciting, and all of it shapes whether the relationship still works in month eight.

Pay Attention to How the Conversation Feels

Notice whether the advisor explains things in plain language, asks about you before talking about products, and lets you take your time. If you leave the first meeting more confused than you arrived, treat that as information. A good advisor expects questions. Pressure to decide quickly is a reason to slow down.

How Better Pockets Answers These Questions

We're a fee-only firm and a fiduciary. We don't earn commissions, and we don't sell products. Our ongoing planning packages are a monthly subscription with no investment minimums. If you want us to manage your investments too, that's priced as a percentage of the assets we manage, and we also offer values-aligned investing options. We offer hourly and project-based help for a specific question as well.

Other costs, like custodian platform fees and fund expenses, are separate from our fee. We disclose them before you open an account and review them with you regularly. The details and the numbers are on our Our Fees page, and our Form ADV is public.

Whether you hire us or someone else, ask these questions. We'd rather you choose well than choose quickly. Reach out if you'd like to start with us.

Questions We Hear a Lot

What's the difference between a financial advisor and a financial planner?

The terms overlap and neither title is legally protected, so the title tells you little. What matters is what the person does, how they're paid, and whether they're a fiduciary. Some advisors mainly manage investments. A planner looks at your whole financial picture, including cash flow, taxes, insurance, and goals.

What does fee-only mean?

A fee-only advisor is paid only by clients, never by commissions or by the companies whose products they recommend. Fee-based sounds similar, but those advisors can earn both fees and commissions. Ask which one you're talking to, and ask for the answer in writing.

How do I check a financial advisor's background?

Search their name on the SEC's investment adviser site and on FINRA BrokerCheck, and use the CFP Board's lookup if they list a CFP certification. Ask for the firm's Form ADV Part 2 as well. It describes services, fees, and conflicts of interest.

How much does a financial planner cost?

It varies a lot. Some planners charge by the hour, some charge a flat or monthly fee, and many charge about 1% of the assets they manage each year. Ask for a total yearly figure in dollars, including investment costs, so you can compare firms side by side.

Do I need a lot of money to hire a financial planner?

Not at every firm, but many set minimums, so ask upfront. We don't have investment minimums, and planning is available for a monthly fee.

_{Sources: Morningstar, 5 Questions to Ask a Financial Advisor; NerdWallet, Fee-Only vs. Fee-Based Financial Planner.}

_{Technical Stuff: This content is for informational purposes only and is not financial, investment, or tax advice. Investing involves risks, including potential loss of principal. Past performance does not guarantee future results. ESG investments may not be suitable for all investors. Better Pockets Financial is a fee-only Registered Investment Advisor (RIA) acting as a fiduciary. For personalized advice, consult a qualified financial professional. Reference BPF's website www.betterpocketsfinancial.com for additional information and disclosures.}