10 Important Questions to Ask a Financial Advisor

It can be a serious challenge for consumers to find a real financial planner - someone that is not tied to a parent company and selling their proprietary products. A real financial planner is paid directly by their clients and places the best interest of their clients first and foremost at all times. A leading organization that these financial planners are members of is the National Association of Personal Financial Advisors (NAPFA).

As an advocate for fee-only financial planning, NAPFA has created a list of questions for consumers to ask their prospective financial advisor. These questions are listed below, and I went ahead and answered them so you understand Lyndale Financial a bit better.

Lyndale Financial is a fee-only financial planner in Nashville, TN.

1. How are you compensated?

I am a fee-only financial planner, which means I am paid only by my clients. This may be an hourly fee or flat monthly fee, depending on the scope of the relationship. I do not receive any commissions, hidden fees, trails, or sales incentives for the recommendations I give my clients.

2. If you accept commissions, will you itemize the amount of compensation you earn from products that you recommend to me?

I do not accept any commissions, but am more than happy to provide an itemized listing of the expenses you may incur as a client of ours. I provide an invoice to clients, so they are aware of the fees they are paying Lyndale Financial.

3. Do you accept referral fees?

As stated above, I do not accept referral fees. I do maintain professional relationships with other financial planners, insurance agents, accountants, and attorneys, but do not accept referral fees from them.

4. Are you held to a fiduciary standard at all times?

Yes, I am legally and ethically bound to the fiduciary standard at all times. This means I must put my clients interests ahead of my own. Unfortunately, the majority of financial advisors are not held to this same standard.

5. Would you sign a fiduciary oath committing to putting my financial interests first?

Of course. I attach a fiduciary oath to the front of each client agreement.

6. Have you ever been disciplined by the SEC or FINRA?

No.

7. Do you provide comprehensive financial planning or just investment management?

I provide both comprehensive financial planning and investment management for clients. If a prospective client is just needing help with one area of their personal finances, we can work together on a project-based plan, which is charged by the hour.

8. Do you have many clients like me?

The majority of my clients are ages 25-45, but I do have clients in or nearing retirement. As a young professional myself, it is great being able to assist clients in the same stage of life as me. We work through issues like paying down student loans and other debts, updating the estate plan after a child is born, saving to buy a new home, for kids’ college education, for retirement, and more.

9. How will you help me reach my financial goals?

Although every client situation is unique, I generally follow a similar process for each new client. I believe in order to reach your financial goals, you must both understand your current financial situation and be motivated to improve. This starts with seeing all of your finances in one spot on our financial planning software. I spend time with you to educate you on your current situation and show you what is possible. Once we are in agreement with my proposed recommendations, we get to work. By taking each task one step at a time, you will be able to transform your current financial situation to point it towards your audacious lifetime goals.

10. What happens to my relationship with the firm if something happens to you?

If something happened to me, your investment accounts would continue to hold the portfolios I built for you to achieve your goals. Your accounts are SIPC protected up to $500,000 per account type. SIPC protection is different from the FDIC insurance you receive at a bank, as your account is not protected from losses due to normal market swings.