Rachel Cruze: Ask 9 Questions To Choose the Right Financial Advisors

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Whether you’re selling a house, choosing tax strategies or making a retirement portfolio, handling complex financial situations on your own can lead to costly mistakes, missed opportunities and possibly legal issues. Money expert Rachel Cruze advises partnering with various types of financial advisors who have the knowledge to help you make better decisions and ensure you’re building wealth properly.

However, you should be prepared to put some time into finding trusted people who will focus on what’s best for your situation rather than just their profits from commissions or fees. In a recent YouTube video, Cruze highlighted nine questions to ask when attempting to choose the right financial advisors — three each for real estate, tax and investing professionals.

Real Estate Agents

1. How Many Homes Did You Sell Last Year?

Asking an agent this question might help you avoid having your home on the market for too long. It will give you an idea of the agent’s selling skills and experience to compare with other potential agents.

The Consumer Financial Protection Bureau also suggested asking related questions about the types of properties the person has sold and their neighborhoods.

2. What’s Your Schedule and Availability Like?

Cruze discussed how the schedule of real estate agents can widely vary and impact your experience. For example, a full-time agent might be more dedicated to helping you any day of the week versus someone who occasionally sells houses as a side job. Make sure the potential agent has the time to meet with you when you’re available and will be committed.

3. How Much Commission Do You Get?

Cruze said, “When it comes to commission, it’s gotten a little complicated over the last few months, so I would go ahead and just ask upfront what their expectation is.”

This advice applies whether you’re on the buying or selling side. Consider the agent’s response and how it could tap into your home’s profits or out-of-pocket costs.

Tax Professionals

1. How Many Clients Do You Manage?

Similar to when choosing a real estate agent, you should ask about a potential tax professional’s workload since it suggests how much time they can dedicate to you. The experience can be very different with a solo tax preparer dedicated to a small group of customers versus someone from a large CPA firm juggling hundreds of clients.

2. What’s Your Experience With Clients Who Have Complicated Finances?

Cruze discussed how situations like divorcing or moving to another state could impact your taxes, and recommended asking about the tax professional’s expertise in these trickier areas. Their response can also give you insight into their experience level. Take time to think through financial situations that might impact you so you can bring them up.

3. How Often Do You Recommend Meeting?

Whether you like talking to your tax professional at their office or over a video chat, make sure you have the same expectations for when and how often you’ll meet. Cruze said that it is especially important to pick someone who will be around to help you out if you happen to have a question or face a situation that requires tax advice.

Investing Professionals

1. How Are You Compensated?

An investment professional will usually receive either a commission or a fee. To Cruze, neither compensation method is really a dealbreaker, but you should still ask about it and consider your comfort around the arrangement.

Cruze said, “I think the way they’re compensated could make you maybe feel a certain way, but also to know the value that you’re getting and that you feel good about that is really important.”

The U.S. Securities and Exchange Commission advised getting clarity about fees that seem complex or misleading, as well.

2. Do You Understand and Honor My Goals?

When picking someone to help manage your wealth, discuss your goals and ask the investment professional whether they’ll honor them. Avoid picking someone who might push you to make decisions that aren’t what you want or in your best interest.

Cruze said, “Remember they’re working for you. This is your money, so make sure that they respect your plan.”

An example Cruze gave was ensuring an advisor understands an investor’s focus on paying off their mortgage while sticking to a 15% investment contribution. Some investment professionals might encourage that person to put more money into the market, or choose riskier investments.

3. What’s the Range of Income and Assets for Your Clients?

Even if your situation is currently simple, it’s worth checking on your investment professional’s experience with complex clients and situations. Cruze mentioned that issues can arise as you become wealthier and deal with taxes and diversified assets.

Picking someone comfortable with these situations from the start can save you from having to switch advisors later. According to Cruze, it can also help with building wealth more wisely.

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