According to a 2021 study by The Harris Poll¹, 53 percent of Americans say one of their top goals for the year was going to be related to their finances. As American society faces an undetermined future, financial professionals have a new opportunity to boost services for existing clients and prove their value to financially underserved consumers. Yet financial professionals are not one size fits all. They have a wide range of investment philosophies, communication styles and ways of charging clients. This diversity can make it difficult to choose a financial professional who meets your needs. But it doesn’t have to. You just need to know what to look for, and the right questions to ask.

Are they qualified?

The most common professional designations you’re likely to encounter in your search are CFP and CFA (chartered financial analyst). A CFP’s skill set is geared toward total wealth management, including debt consolidation, portfolio management, retirement savings and estate planning. A CFA’s skill set is more specifically focused on managing financial portfolios for individuals and businesses. A financial professional must also be a state-licensed life insurance producer and appointed to sell life insurance products.

If you’re considering working with a financial professional who promotes variable products, like variable annuities, variable life insurance and mutual funds, it’s a good idea to check their employment history and determine whether there have been investment-related, consumer-initiated complaints or arbitrations against them. (Bear in mind that not all complaints or arbitrations are reportable.) Any financial professional registered with the Financial Industry Regulatory Authority can be checked through BrokerCheck.

Are they a good fit for you?

Most financial professionals you research will do a fine job assisting you with your assets. But a great financial professional will take time to truly dig into your financial goals and help you build a plan to pursue them. Look for a financial professional who makes you feel comfortable and who will really learn the complexities of your financial situation.

Also consider whether the financial professional’s communication style is a good match for you. Do they explain things in a way you comprehend? Ask to see samples of the quarterly reports they send to clients. These documents may tell you a lot about how the financial professional communicates with clients.

For instance, some financial professionals may not send much more than the amount of your total assets and how much you’ve earned since the last quarter. Others may send detailed reports with charts describing your asset mix, their rationale and an overall assessment. Whatever type of report they offer, it should be one that you understand and that contains the type of information you’re interested in. 

And about that fine print …

Before you begin working with a financial professional, make sure you know all the details about how they get paid. Fee-based financial professionals will usually charge a percentage of the assets they oversee for you. Commission-based financial professionals will not charge you a fee. Their commissions are paid by the companies issuing the products they sell, so there’s no out-of-pocket cost to you.

The bottom line: Ask questions

When you meet a financial professional, be open about your questions and concerns. Someone who answers your questions clearly and to your satisfaction may be just the right fit to help you reach your financial goals.