3 Questions to Ask When Hiring a Financial Professional

Interracial couple sitting at their living room table with an open computer. Writing notes on paper.

Choosing the right financial professional might be one of the most important decisions you make. After all, you’re trusting this person to manage your money and to help you plan for your financial future.

Less than 25% of federal employees have ever consulted a financial professional.  I found that number shocking because federal employees are typically very good savers and relatively conservative spenders.  However, so many are worried that they’ll run out of money in retirement!

Are they afraid to ask for help?  Worried of making a bad decision?  Just don’t know where to start?


There are some common questions that I want to share with you.  You’ve probably at least had them in the back of your mind, but maybe haven’t known how to articulate them.

The three big questions that I see most frequently asked are these:

  • Why should I engage a financial professional?
  • What should I expect in the process?
  • What’s it going to cost me?

Let’s get to it…

Why should I engage a financial professional?

Here’s the reality: We’re all good at something. Federal employees have a unique set of training and experience that makes them great at their jobs in their respective professions.  Likewise, financial professionals are good at planning. That’s their job. That is what they’ve devoted their professional career to doing.

It’s a lot like going to the doctor.  If I get sick, I go to the doctor – the professional – the person who has the license and education to provide medical advice to me. The nurse is going to take my vitals, get my medical history, ask me a bunch of questions, check any other medications I’m taking—all of that to conduct the initial evaluation. Then the doctor comes in to evaluate me and observe my symptoms to see what’s going on.

Once the doc has done an assessment, they may order some lab tests or diagnostics to really get to the bottom of what’s happening. They’re likely going to make some recommendations of treatment, write a prescription for any medications, or send me to a specialist if there’s something uniquely wrong with me. Of course, they’ll insist on following up to monitor my progress to make sure that I’m getting better.

They have the education and experience that the average person simply does not have, and we leverage that experience to get better.  That should be true if you’re going to the doctor or a financial professional.

Have you thought about being a “do-it-yourselfer”?  In a world of great financial complexity, and an ever-increasing demand for our attention – think twice!

Most of the time, people are “do-it-yourselfers” because they don’t really know what else to do. They’re afraid of engaging a financial professional, so they’ve just done the best that they can on their own. But in reality, do-it-yourselfers are far less likely to achieve their goals.

Looking back at the doctor analogy that I just shared, if I decided to be a do-it-yourselfer, I would have done things differently.  Perhaps I Google my symptoms on the Internet and I might visit WebMD to see all the scary stuff that might be wrong with me. I see what other patients have to say and what they think I should do about my problem.  Remember, those are my peers – the people who are sick, too.  I begin taking their advice, even though I’m not sure what’s wrong with me or that we even have the same condition. I might choose to self-diagnose and self-medicate.

So, in which scenario do I have the best chance of actually getting better? Seeing the professional, of course.

Is going to the doctor a pain in the neck sometimes? Yes. Do they sometimes give you bad news that you don’t really want to hear? Yes. Do they have a ton of training and real-world experience that helps them to diagnose and make a recommendation for the thing that’s wrong with you? Yes.

Financial professionals are no different. We live in a complex financial world.  If you are overwhelmed and try to do this all by yourself, you run the risk of getting buried with no progress made.  You may start to look back and wonder what you should have done and how to recover from the mistake of doing nothing.

One of the important aspects of working with a financial professional is that they’re able to foresee potential weaknesses in a plan before it’s too late.  This allows you to operate in a proactive state versus a reactive state. And no one likes reactive planning.

What should I expect in the process?

A financial professional will likely require a married couple to attend their appointments together. They must get both perspectives out, because the decisions that will be made affect them both!  Plus, there’s no sense in one party attending and then having to go home and try to explain it to the other party.

Step 1: Figure out what you want

The next step is they’re going to begin to help you to articulate how you want to live in retirement. Remember, the very first goal of any plan is you must figure out what you want. They’re going to help you to determine what you want your retirement to look like. Plus, you may have some goals between now and the time you retire as well.

Step 2: Figure out where you’re at

Next, they’re going to help you compare where you’re at today with where you want to be in retirement – that tells us where the gap is. This gives you a starting point to begin planning to fill the gap or the hole that exists in your plan.  It also serves as a reminder that if you don’t make changes to what you’re doing right now, there’s going to be a big portion of your retirement that you’re not going to be able to afford.

Step 3: Figure out what needs to happen

Once they have a very clear picture of your entire financial landscape, the financial professional will begin to make recommendations on the next steps to take you on your financial journey.

It comes as no surprise that those folks who have a financial professional are far more likely to be on track to meeting their goals than a traditional do-it-yourselfer. Let me share with you a couple of those things that I want you to let sink in as you’re thinking about whether you should be engaging a financial professional.

When you try to do these things yourself, to be a true do-it-yourselfer, you might be guessing, you might be hoping, or you might be winging it. None of these strategies are ideal. When it comes to financial planning, we don’t have a lot of room for significant error and mistakes that might be made. A professional will help you to have very specific goals that are clearly identified. Remember, that’s the start of any plan. They’re going to explore and implement various options, strategies or products to meet those goals that you’ve identified and then help you to adjust your course as necessary.

Financial professionals will also help you by providing reassurance or validation of the decisions that you’re making, so that gives you the confidence that you’re moving in the right direction. They’re going to help you to anticipate those challenges and offer alternative ideas to aspects that you hadn’t considered.  If appropriate, they’ll also be coordinating with other professionals like a CPA or an estate planning attorney to look at your bigger financial picture. We want to make certain that all the financial affairs are in order and we don’t have anything left undone.

Of course, the right financial professionals are going to help federal employees to get the best of what the government benefits can provide AND the best of what the private side has to offer.  In other words, they help you get the best of both worlds.  Sometimes the government benefits have amazing elements to them AND the alternatives out in the private sector may allow for more flexibility or control than what you can find in the government benefit.  All of those aspects are so very important.  To be clear, you shouldn’t have to choose “government” or “private” – you can often have a healthy mixture of both.  Each have their own advantages and should be leveraged accordingly.

A financial professional will also provide strategies based on your situation.  Things like tax considerations, when to turn on Social Security, or how to withdraw money smartly out of accounts like the Thrift Savings Plan. All of these strategies are something they’re very accustomed to implementing with their clients.

What’s it going to cost me?

There’s plenty of free advice out there. Remember our doctor analogy where you can just Google everything and try to figure it out yourself?  In that scenario, you might not get quite the answers that you need, you might misdiagnose the problem or self-medicate with the wrong solution.

Let’s talk a little bit about paying a financial professional for their services. Of course, you’re not just paying to sit in a nice office and having a conversation.  You’re paying for the education and the expertise that the professional must carry to ensure that they’re providing great advice to their clients. No professional works for free – period. I don’t work for free. You don’t work for free. If someone asked us to work for free, we would look at them like they were crazy, right?

Many offer an initial consultation to see if they can genuinely help.  This also serves as an exploratory session to give you a chance to test drive working with them.  However, the real work of giving advice and recommendations isn’t free.

Financial professionals can charge in different ways (a lot of it depends on how they are licensed).  Often times, their compensation depends on the type of help you need and the complexity of your situation.  There may be a planning fee, retainer, management fee or a commission based on which product you choose.  Neither of these fee structures are inherently good or bad.  You simply must acknowledge that you’ll pay something for solid advice.  Remember the ol’ adage, “you get what you pay for”?  Your long-term financial security is something worth investing in – pun intended.

Talk with the financial professional about how they are compensated.  Don’t be afraid to ask those questions so you better understand how your relationship will work.   Everyone wants to feel like they are getting a good deal in this situation.  The financial professional wants to feel that they are compensated for the help they provide to you.  Meanwhile, you want to know you’re getting great service and that you can count on their ongoing help.

Fees charged should always be relative to the value that you are receiving. Don’t go with the government mentality of going with the lowest bidder. That’s not who you want to go with on your financial plan!  That would be like using a Groupon for a root canal – we probably don’t want to go to the oral surgeon who needs coupons to drum up business.  Seek out a financial professional who is focused on collaborating with you and advocating for you – even in areas that don’t make him/her any money.  For instance, helping you to maximize the monthly pension you’ll receive as a retiree.

I don’t believe that when you’re engaging a financial professional that it has to be a zero-sum game.  That’s the idea that if they win, you must lose.  The famous Zig Ziglar said, “You can get everything you want in life if you just help enough other people get what they want.”  I want financial professionals to be well-compensated because they’re providing legitimate, solid advice to their clients so their client reaches their goals.  This is a win-win scenario.

Federal employees MUST seek guidance from a financial professional who understands the unique complexities of federal benefits.  They must regularly work with federal employees and have proper training to give tailored advice.  Without it, they’ll unknowingly give bad advice even if they are well-intentioned.  On the contrary, those who are properly trained to work with federal employees will be able to provide some creative solutions in the private sector that simply aren’t available on the federal side.

I work with financial professionals nationwide who specialize in serving federal employees with their unique planning needs. Our team provides tailored training to them on the complexities of federal benefits.  This helps them to provide credible, top-notch financial planning services to their federal clients.

Whether you work with one of our financial professionals or not, I urge you to find your person.  They should have extensive experience and knowledge of federal benefits to begin mapping out your journey.

To find a local qualified financial professional in the ProFeds network, CLICK HERE.


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