Financial Planner: Interview Questions

Hiring A Financial Planner
Written By Thomas Henske

As a student-athlete, you don’t have to navigate the unique challenges and opportunities that come with balancing academics and athletics. A financial planner can provide expert advice on budgeting, saving, and investing, ensuring you make the most of your resources while preparing for your future.

This guide will help you ask the right questions to identify a truly capable fiduciary to guide you in your financial endeavors.

INSTRUCTIONS

  • Send this PDF to at least three candidates or fill in notes from your firm interviews.

  • Compare answers from each firm to highlight areas of importance and concern.

  • Remember, you are hiring a critical advisor in your life, not shopping for a new friend!

ITEMS TO COVER

  1. Client Relationship Management

  2. Advisor Qualifications

  3. Investment and Financial Planning

  4. Compliance and Ethics

  5. Firm Infrastructure and Future Planning

  6. Fees and Compensation

  7. Client Security

CLIENT RELATIONSHIP MANAGEMENT

  • Describe your firm’s typical client.

    • Does your firm have a unique expertise or a specific focus on certain types of clients (e.g., retirees, doctors, small business owners)?

    • If you had to identify one type of client that is the largest percentage of your firm’s client base, who would it be?

  • What is your typical client's account size?

    • How many clients does your firm have? And how many of those do you personally oversee?

  • Describe your firm’s service profile.

    • Describe the typical service your client expects and what your firm delivers as standard practice.

    • How often do clients get to speak with an advisor and what is the advisor’s level of experience?

  • Does your firm utilize technology to interface with clients? Y□/N□

    • Describe the ways clients can access their advisor and their information.

ADVISOR QUALIFICATIONS

  1. Please provide a list of your credentials and background (other than the licenses previously described).

    • How long have you been a financial advisor?

    • What was your formal training?

    • What do you do to stay current?

    • What other skills do you bring to the relationship that can improve a family’s financial condition?

    • What are the credentials of the other people working on client accounts?

  2. Please provide a list of all the licenses you carry.

    • Are you a licensed stockbroker (series 7)? Y□/N□

    • Are you a licensed insurance agent? Y□/N□

    • Are you a Registered Investment Advisor? Y□/N□

INVESTMENT AND FINANCIAL PLANNING

  1. Explain (in simple terms) your firm’s investment process.

    • Do you provide clients with an investment policy statement? Y□/N□ How often is it reviewed?

    • Does it identify appropriate benchmarks for each investment so clients can analyze your firm’s manager selection success? Y□/N□

    • Please provide a sample investment policy statement.

    • Please provide a sample financial plan.

    • Does your firm’s performance report show a client’s returns, net of all fees? Y□/N□

    • Does it illustrate each investment against an appropriate benchmark? Y□/N□

  2. Does your firm use a formal investment selection process to choose underlying investments? Y□/N□

    • If yes, please provide a copy

    • Does your firm rely on someone else’s research? Y□/N□ If so, who and why?

    • Does your firm direct any client assets to outside hedge funds or other partnership structures? Y□/N□ If so, what are your firm’s policies and procedures for selecting these funds?

    • Does your firm manage any of the assets in-house? Y□/N□

    • If a client works with you, would they have a limited number of investment choices? Y□/N□

    • How many employees are employed as full-time research staff without any other responsibilities?

COMPLIANCE AND ETHICS

  1. What safeguards does your firm have in place to ensure that clients’ assets are protected from fraud?

    • Where would a client’s assets be custodied?

    • Does your firm use any structures where it is deemed to have custody (e.g., limited liability companies or hedge funds) and where it is the manager? Y□/N□ If yes, please explain.

  2. Does your firm require that any investment that is not held by an independent custodian (such as partnerships, hedge funds, or LLCs) utilize a well-known accounting firm to conduct audits of these investments? Y□/N□

  3. Do all of the funds/investments that may fall into the category above employ a third-party administrator? Y□/N□

  4. Would this be a discretionary relationship or would your firm contact the client before making any changes to their portfolio?

    • Discretionary□ / Non-Discretionary□

  5. Who can move money out of clients’ accounts?

  6. How would clients’ accounts be titled?

  7. What is your firm’s level of liability insurance and who is its liability insurance carrier?

    • Please provide a copy of your firm’s policy or outline of coverage from your firm’s insurance company.

  8. How does your firm ensure privacy of client information?

    • Please provide a copy of your firm’s privacy policy.

  9. How does your firm monitor employees’ ethical conduct?

  10. Has your firm ever had to fire an employee for unethical conduct? Y□/N□

FIRM INFRASTRUCTURE AND FUTURE PLANNING

  1. What are your firm’s total Assets Under Management (AUM) / Assets Under Advisement (AUA)?

  2. What does your firm do to plan for the future?

    • What happens to a client’s relationship if their advisor dies, is disabled, or retires?

    • Who services a client’s account besides the advisor?

  3. What happens to the firm if the largest shareholder dies?

  4. How many advisors does your firm have and what are their credentials?

    • How many support professionals does your firm have?

    • What would a client’s team look like (please list names, titles, licenses, and designations)?

  5. Does your firm utilize technology to interface with clients? Y□/N□

    • Describe the ways clients can access their advisor and their information.

  6. How many times per year do you meet with clients face to face?

  7. In what other forms will your firm communicate with clients (describe)?

FEES AND COMPENSATION

  1. How do you get paid?

    • How does your firm get paid for investments it may recommend?

    • Do some recommended investments pay your firm more than others? Y□/N□ If yes, please explain in detail.

    • Is your firm paid commissions on investments or other products (e.g., insurance) it sells? Y□/N□

      • If yes, what percentage of your firm’s business is fee-based versus commission-based?

    • Will your firm ever recommend commission-based products for a client’s portfolio? Y□/N□

    • Are there any other forms of compensation (such as cash, trips, or other bonuses) that your firm may receive as a result of any business a client may engage in with your firm? Y□/N□

      • If yes, please explain.

    • Does your firm receive compensation from any mutual fund or other investment companies that it may recommend? Y□/N□

      • If yes, please explain.

    • Can your firm be paid a flat annual fee? Y□/N□

    • Can it be an agreed-upon dollar amount per year? Y□/N□

    • Can it be an agreed-upon percentage per year? Y□/N□

    • Do you manage any client assets yourself? Y□/N□

      • If yes, how do you determine when it is time to fire yourself?

    • Do you have any economic incentive to manage the funds yourself? Y□/N□

      • If yes, please explain.

    • Is there any case where your firm may charge clients a wealth management fee and then another fee on top of that for investment products managed by your firm or any other business related to your firm? Y□/N□

      • If yes, please explain.

    • Aside from what a client pays you, what other costs would they incur? Please be very specific.

    • Does your firm engage in soft dollar arrangements? Y□/N□

      • If yes, please explain.

CLIENT SECURITY

  1. What safeguards does your firm have in place to ensure that clients’ assets are protected from fraud?

    • Where would a client’s assets be custodied?

    • Does your firm use any structures where it is deemed to have custody (e.g., limited liability companies or hedge funds) and where it is the manager? Y□/N□

      • If yes, please explain.

  2. Does your firm require that any investment that is not held by an independent custodian (such as partnerships, hedge funds, or LLCs) utilize a well-known accounting firm to conduct audits of these investments? Y□/N□

  3. Do all of the funds/investments that may fall into the category above employ a third-party administrator? Y□/N□

  4. Would this be a discretionary relationship or would your firm contact the client before making any changes to their portfolio?

    • Discretionary□ / Non-Discretionary□

  5. Who can move money out of clients’ accounts?

  6. How would clients’ accounts be titled?

  7. What is your firm’s level of liability insurance and who is its liability insurance carrier?

    • Please provide a copy of your firm’s policy or outline of coverage from your firm’s insurance company.

  8. How does your firm ensure privacy of client information?

    • Please provide a copy of your firm’s privacy policy.

  9. How does your firm monitor employees’ ethical conduct?

  10. Has your firm ever had to fire an employee for unethical conduct? Y□/N□

    • If yes, please explain the reasoning and what was done to prevent the act from happening again.

Thomas Henske
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