By Caroline M. Friedrich, CPA, CFP®
Finding a financial advisor can feel daunting. After all, your advisor will know all the details about your finances while helping you make significant investment decisions. You naturally want someone you can trust to communicate consistently with you, understand your goals for the future, and support you in making wise choices.
When it comes to wealth building, we can’t overestimate the importance of partnering with a knowledgeable financial advisor. While many people would state that utilizing the expertise and skills of a financial advisor is worth it, it’s still important to not pick just anyone. You want to be confident that you’re working with someone who knows your specific goals and can help you take the steps to achieve them.
Whether you’re interviewing advisors for the first time, reevaluating your current one, or just wondering what to ask at your regular check-ins, this guide will help you know what questions to ask and what to look for from a quality pro.
1. Are You a Fiduciary?
There’s a reason this is the first question—its importance cannot be overstated! An advisor who serves as a fiduciary accepts a responsibility to put his or her clients’ interests first and foremost in all decisions. A fiduciary is legally required to avoid conflicts of interest and remain unbiased in their recommendations and advice.
How can you know for certain that an advisor you’re interviewing is a fiduciary? The firm will either be listed as a Registered Investment Advisor or the advisors on the team will hold certifications that hold them to the fiduciary standard, such as the CERTIFIED FINANCIAL PLANNER™, Chartered Financial Analyst®, or Certified Public Accountant professional designations. Keep in mind, if the advisor doesn’t fit those descriptions, they may still act as a fiduciary in certain situations, like sharing a recommendation, but not necessarily when selling products.
Nalls Sherbakoff is a Registered Investment Advisory firm and abides by the fiduciary standard of professional conduct. We believe in transparency and honesty, doing what we say and finishing what we start—all for your benefit.
2. How Do You Get Paid for Your Services?
Financial planning and investment costs can be confusing. And too often financial advisors don’t readily disclose their fees. As fee-only advisors, our clients always know what they’re paying and what they’re receiving for their money. We want our clients to feel comfortable with their strategies and confident that there are no hidden fees eating away at their hard-earned savings.
The most common way we are compensated is by an Assets Under Management (AUM) fee, which is paid quarterly, based on the value of your assets. There are no other hidden costs from us and we do not earn money through commissions.
3. What Are Your Qualifications and Credentials?
We take credentials seriously, and we think you should too. Credentials and education play a critical role in your advisor’s competence. There are hundreds of designations in the financial services field, and some are more applicable to your needs than others.
Personally, I am a CERTIFIED FINANCIAL PLANNER™ professional who recognizes the knowledge and experience I have to help people design comprehensive plans that incorporate all pieces of their financial puzzle. I am a fiduciary who prioritizes putting my clients’ interests first as I help them navigate complex issues and implement strategies created for their unique needs. As a firm, we at Nalls Sherbakoff pursue education and credentials because of how dedicated we are to providing unparalleled client service.
Use a designation-check database to learn more about the credentials financial advisors can earn, and ask the advisors you are researching what they do to continually hone their skills and stay up to date in the industry.
4. What Is Your Approach to Financial Planning?
Talent, luck, and hard work may be factors in achieving financial success, but financial freedom is achieved through planning, effort, and strategic management. Those who achieve it do so because they have created a road map to get there.
Developing that plan is complex and individualized, but the components used in creating it are pretty straightforward. We use an approach to financial planning to help our clients navigate the journey while constructing a solid plan. Our strategies of financial planning—investments, income planning, insurance, tax planning, and estate planning—are a simple but comprehensive approach to financial planning. Missing any one of these components can put your financial future at risk.
5. What Is Your Investment Philosophy?
It’s important to work with an advisor who shares a planning and investing philosophy similar to your own. Does your advisor stick to a scientific, evidence-based approach? Do they believe in buy-and-hold or do they move to cash when the market looks shaky? Talk with an advisor about how they guide clients’ investing and financial decisions.
At Nalls Sherbakoff, we know that a sound asset allocation strategy is a key factor in creating a confident financial future. Our investment strategies are customized to your unique goals and needs so you can maximize your growth while protecting your wealth.
6. How Do We Work Together and Communicate?
Over the years, we have created proven and reliable systems and processes that we use to communicate with our clients while helping them work toward their goals. We tailor our advice to your specific situation and we don’t give generic answers. We do the legwork to get to know you, your situation, your dreams, and your challenges. Our specialized touch can make all the difference.
When selecting your advisor, the relationship should feel right, and you should never feel pressured to make a decision quickly. We offer a complimentary consultation, where you can ask questions, evaluate our processes and services, determine if our personality is a good fit, and give you the information you need to make an informed decision.
7. What Services Do You Provide?
Not all financial advisors can provide comprehensive financial planning. Some cannot sell insurance or securities, such as mutual funds or stocks, if they don’t have the appropriate licenses. Ask a financial advisor what services they provide, whether or not they have a focus, and if they offer a broad spectrum of solutions to meet your needs. When creating a plan together, be sure to ask your advisor why they are recommending particular services and solutions over others.
Our firm’s comprehensive services include retirement planning, portfolio management, cash flow analysis, estate planning, tax strategies, lending coordination, pension consulting, financial literacy, and more.
8. What Types of Clients Do You Typically Work With?
Some financial advisors focus on serving a specific demographic or level of investable assets, so you’ll want to find this out before choosing an advisor. Why is this important? Because you deserve advice and services tailored to your unique needs.
Most of our clients are pre-retirees or retirees, which means they don’t have the exact same financial concerns as many other people. They don’t panic when the market shifts and they don’t worry about tracking expenses. They need an advisor who will speak to where they are at, not dole out basic financial principles. At Nalls Sherbakoff, each of our advisors has a unique specialization and our experience allows us to give you the advice that can make the most difference in your life.
9. Do You Have a Specialty or Area of Expertise?
Our comprehensive wealth management team focuses on 3 main areas of expertise:
- Pension Consulting: We offer pension consulting services to employee benefit plans and their fiduciaries, both for new and existing plans.
- Portfolio Management: Our team is skilled in constructing investment portfolios that are tailored to your specific needs, investment objectives, and risk tolerance.
- Financial Planning: We offer planning services that range from broad, comprehensive financial planning to consultative or single-subject planning to fit your needs.
10. Are You Well Connected With Other Professionals?
At some firms, you may work with multiple financial advisors depending on your appointment time or needs, while other firms may pair you up with one financial advisor with whom you’ll work one-on-one. This is important to know so you can meet the other team members with whom you might be collaborating.
While you will have a strong relationship with your primary advisor, everyone at Nalls Sherbakoff works as a team to offer you the highest level of service. In addition, we are well connected to other professionals in Knoxville (such as CPAs, estate planning attorneys, and insurance advisors), so we can add value by connecting clients (without further compensation) to a competent specialist. We prioritize getting to know our clients and their goals so we can put your dreams at the heart of your financial plan.
Find Your Right Fit
Are you happy with your current financial advisor or investment professional? Great! Keep investing for the long term and meeting regularly.
Perhaps you already have an advisor, but these questions may lead you to realize your current financial partner isn’t the best fit for you and your needs. It’s important to find an advisor you can trust, and that may mean it’s time to move on.
At Nalls Sherbakoff, we believe in complete transparency and want our clients to feel comfortable working with us and asking us questions. If you’d like to learn more about our answers to these questions or any others you may have, don’t hesitate to reach out. To set up a complimentary appointment so we can see if our services are the right fit for you, call us at (865) 691-0898 or contact us online.
Caroline Murphy Friedrich is a financial advisor with The Nalls Sherbakoff Group, LLC, an independent, fee-only financial planning and investment management firm. With over 12 years of experience in the financial industry, Caroline is dedicated to helping her clients make informed, long-term financial decisions that add value to their lives and positively impact future generations. Caroline has deep experience in accounting, having spent the first decade of her career as a CPA. Now she blends that expertise with her CERTIFIED FINANCIAL PLANNER™ certification to design comprehensive plans that incorporate all pieces of their financial puzzle. Caroline is a fiduciary, putting her clients’ interests first as she helps them navigate complex issues and implement strategies created for their unique needs.
Caroline graduated from the University of Tennessee with a bachelor’s degree in accounting and a Master of Accountancy with a concentration in tax accounting. She is a proud Knoxville native who loves to spend her free time with her husband and their three daughters. When she’s not in the office, you can often find her exercising, golfing, reading, or enjoying her friends and family. To learn more about Caroline, connect with her on LinkedIn.
DISCLOSURES: The information provided in this letter is for general informational purposes only and should not be considered an individualized recommendation of any particular security, strategy, or investment product, and should not be construed as investment, legal, or tax advice. The Nalls Sherbakoff Group, LLC makes no warranties regarding the information or results obtained by third parties and its use and disclaims any liability arising out of, or reliance on the information. Please contact us if there have been any changes in your financial situation or investment objectives, or if you wish to impose any restrictions on the management of your account or modify existing restrictions. You may contact us by phone at 865-691-0898 or email at email@example.com. Any indexes reflect investments for a limited period and do not reflect performance in different economic or market cycles and are not intended to reflect the actual outcomes of any client of The Nalls Sherbakoff Group, LLC. Past performance does not guarantee future results.