10 Questions To Ask A Financial Advisor

Meeting a financial advisor for the first time? Feeling unsure about what to ask a financial advisor? Do not worry!

There is a straightforward way to ensure you receive the right guidance. Asking the right questions can give you a clear picture of what the advisor brings to the table, how they work, and whether they are a suitable fit for you.

These 10 questions may seem basic at first, but they can help you dig deeper and assess whether the advisor is truly worth your time and money.

Think of this as your mini-interview! So, go in prepared, ask openly, and use these 10 questions as your starting point.

Below are 10 questions to ask a financial advisor that can help you select a suitable professional:

1. What are your qualifications?

One of the first things to ask a financial advisor is about their qualifications. If you visit the Financial Industry Regulatory Authority (FINRA) website, you will discover that there are 251 different certifications for financial advisors.

That is right - 251!

Your financial advisor could hold any one of these. Each certification has its area of focus and expertise.

Some of the certifications you may come across include:

• Certified Financial Planner (CFP)
• Accredited Investment Fiduciary (AIF)
• Chartered Retirement Planning Counselor (CRPC)
• Certified Fund Specialist (CFS)
• Certified Divorce Financial Analyst (CDFA)
• Certified Annuity Specialist (CAS)
• Certified Wealth Strategist (CWS)
• Chartered Life Underwriter (CLU)
• Certified Tax Advisor (CTA)
• Registered Financial Consultant (RFC)
• Certified Income Specialist (CIS)
• Certified Insurance Counselor (CIC)
• Retirement Income Certified Professional (RICP)
• Certified College Funding Specialist (CCFS)
• Certified Portfolio Manager (CPM)
• Chartered Financial Consultant (ChFC)
• Accredited Estate Planner (AEP)
• Certified Digital Asset Advisor (CDAA)
• Certified Financial Fiduciary (CFF)
• Chartered Market Technician (CMT)
• Certified Risk Specialist (CRS)
• Certified Exit Planning Advisor (CEPA)
• Certified Personal Retirement Specialist (CPRS)
• Certified Medicaid Planner (CMP)
• Certified Financial Education Instructor (CFEI)
• Certified Social Security Claiming Strategist (CSSCS)
• Certified Trust and Fiduciary Advisor (CTFA)
• Chartered Alternative Investment Analyst (CAIA)
• Certified Sustainable Finance Specialist (CSFS)
• Life Underwriter Training Council Fellow (LUTCF)
• Board Certified in Estate Planning (BCEP)
• Certified Treasury Professional (CTP)
• Certified Retirement Education Specialist (CRES)
• Chartered Mutual Fund Counselor (CMFC)
• Behavioral Financial Advisor

A lengthy list of certifications can feel overwhelming, but it also means you have options. A financial advisor can assist you with a number of things, starting from student loans, insurance planning, to retirement and estate planning. Chances are, there is a certified professional for each of these concerns and more.

Not all financial advisors carry the same credentials, so make sure to inquire what certifications your advisor holds and then analyze if the one advising you is the right fit for your financial journey.

2. Are you a fiduciary?

When you ask someone if they are a fiduciary, you get to know whether they are legally required to act in your best interest.

The emphasis here is on the word “legally”.

A fiduciary is someone who is bound to put your financial interests ahead of their own. They cannot push products to earn commissions. They cannot charge any hidden fees. They can also not offer advice that benefits them more than it benefits you. They must avoid conflicts of interest and be transparent in every aspect of their work. Period.

So, when you are sitting across from a financial advisor, just ask - Are you a fiduciary? If the answer is no, ask why not. If the answer is yes, ask them to explain what that means.

Now, being a fiduciary does not mean you should trust them unquestioningly. No one deserves that kind of unchecked power over your money. But this one tag can show that they are at least working within a framework that prioritizes your interests. And that alone can offer a surprising amount of peace of mind.

3. What compensation model do you follow?

Financial advisors do not all work the same way.

• Some charge hourly fees. This can be straightforward and great if you just need occasional guidance.
• Others work on a flat monthly or annual retainer. This can be helpful if you want ongoing support but don't have a large amount of assets yet.
• Some charge based on a percentage of the assets they manage on your behalf. This is called the Assets Under Management (AUM) model. It can work well if you are mainly looking for someone to manage your investments actively.
• And, of course, there are also commission-based financial advisors. These advisors earn money by selling you financial products, like insurance policies or mutual funds. This is something you should be aware of upfront, as it can create a conflict of interest.

So, here is what you should do - ask them to explain their compensation model in plain English. No jargon. Ask how much you will be paying, when, and what you will get in return. If you do not understand this now, you might end up paying more than you expected.

Also, keep in mind that no model is inherently good or bad. Ultimately, the best model is the one that aligns with your needs and budget. But the only way to figure that out is to ask the question.

4. What do you specialize in?

Not all financial advisors do the same thing. Some focus on retirement planning, others on tax strategies, estate planning, insurance, or investment management.

And while many financial advisors can offer general advice, you want someone who has spent some time in the specific area you need help with.

This is not just about certifications, but what they have actually done. You are looking for experience, so it may help to hire someone who has spent at least 10,000 hours on the job. This comes down to roughly five years or more.

Be sure to ask the financial advisor about their area of specialization. Maybe they have spent most of their career helping people reduce their tax liability. Or perhaps they have worked closely with families on estate plans.

Financial advisors typically specialize in a specific area of expertise. You must not assume that just because someone says they are a retirement planner, they will also be great at tax planning or helping you pick the right long-term care insurance plan.

You may want to hire someone familiar with your industry or field. Someone who has helped people like you before, handled similar situations, and solved similar problems. If you find someone like this, chances are, they will likely be better at what they do than someone else.

5. What services do you provide?

One of the most important questions to ask when looking for a financial advisor is what exactly they specialize in helping with.

Services are not the same as expertise. Just because someone knows about something does not mean they will do it for you. Financial advisors may offer services like investment management, where they build and manage your portfolio, rebalance it regularly, and help you stay on track. They may assist with tax planning by filing your tax returns. Others may handle paperwork for tasks such as 401(k) rollovers or Roth IRA conversions. Financial advisors can also assist in writing your will or establishing a trust for your children.

You must understand these services to make an informed decision about whether hiring them is suitable for your situation and needs.

6. Do you work alone or have a team?

Some financial advisors work as part of a larger firm or office, backed by a team of professionals who help with everything from scheduling to portfolio management to client support. Others are independent and handle most tasks on their own.

One is not better than the other. They are just different, and what matters is which one fits you better.

Working with a team can come with certain perks. Things tend to be more streamlined. Appointments get scheduled faster. Paperwork gets handled efficiently.

On the other hand, a solo financial advisor can offer something else that is hard to match. They provide personalized attention. You deal with the same person each time, who knows you well enough.

Ultimately, this is not about choosing the better option. It is about choosing what kind of structure you feel comfortable with.

7. How many clients do you have?

This may seem like a nosy question. But asking how many clients a financial advisor has can give you a glimpse into their experience and even their working style.

Now, to be clear, there is no magic number.

A financial advisor with a smaller client base might offer more personalized service and deeper relationships. Someone with a larger client base might have more experience and a more streamlined process.

What you want to find out is whether they have enough time for you.

If a financial advisor is juggling 100 clients solo, they may not be able to give your portfolio the attention it deserves. On the other hand, if they have only a handful of clients, they may not have sufficient experience. In this case, you may want to ask more about their background and experience.

Another thing to ask a financial advisor is what kind of clients they usually work with. Do they specialize in serving high-net-worth individuals, retirees, business owners, medical professionals, or other groups? If their typical clients look like you, that is a good sign, as the advisor would likely be familiar with the kinds of financial concerns you will face.

Keep in mind that they may not be able to provide an exact number. Some advisors are bound by confidentiality or simply prefer not to disclose it. But you can ask them for a ballpark range.

8. How often are you willing to meet to discuss my goals, progress, and concerns?

Perhaps the best question to ask a financial advisor! The frequency and style of communication between you and your financial advisor can significantly impact the quality of your relationship. So, you must discuss your preferences with the advisor.

For instance, do you prefer regular check-ins once a month, or are you more of a 'call me when something comes up' kind of person? Either way, your financial advisor should be comfortable working around your communication style. Therefore, ensure that you set those expectations upfront.

Also, ask them how often they typically meet with clients. Do they send regular reports or investment updates in between? What if there is a market dip or sudden change? Are they open to hopping on an unscheduled call? If you are someone who wants to discuss every aspect of your portfolio, your financial advisor should be aware of this before you begin. Likewise, if you are the type who is hands-off primarily and just wants occasional updates, they should be okay with that too.

9. How do you decide on investment strategies?

This is one of the most important questions to ask a financial advisor, because, ultimately, this is where your advisor's value is truly demonstrated. Ask them:

• How do they choose investments?
• Do they prefer growth stocks or value stocks?
• Do they lean more toward mutual and index funds or individual securities?
• Are they active investors or do they believe in a more passive, long-term approach?
• Also, ask if they use a benchmark to measure performance. For example, do they compare your portfolio to the S&P 500?
• Do not forget to ask how they view risk and what happens if the market dips? Do they hold steady or make changes?

Even if some of their answers go over your head, that is okay. What matters is that they can explain their approach to you. This can also help you see how clearly they think. And if they are logical or scattered.

10. Is there anything you need to ask me?

It is easy to think of a meeting with a financial advisor as a one-way street where you ask the questions and they give the answers. But it should not work that way. A good advisor will also want to ask you a few things. And, you should welcome it.

They might want to understand your goals more clearly, such as:

• What are you working toward?
• What does your timeline look like?
• What kind of support are you hoping for?

They may ask about your current financial situation, your income, debts, spending habits, or investments. They will likely also want to gauge your risk tolerance, values, and even fears regarding money.

All of this can help them determine the best way to guide you. Some might ask about your personal or professional life, such as where you work, whether you plan to start a family, how secure your job is, or if you are considering starting a business.

Giving your financial advisor space to ask questions does two things:

• First, it shows you are open to building a real partnership.
• Second, it helps them perform their job more effectively.

If you are wondering what questions to ask a financial advisor, this list is for you! But what next?

So, you have asked all the right questions. You have had the meeting and taken notes. Now what?

Once you are back home, take a moment to review the answers you received. Evaluate if the advisor seemed to understand you and your needs. If something felt off or if you are unsure about anything, schedule a second meeting. A good advisor will not mind.

And if you felt fine but not entirely convinced?

Meet another financial advisor. Then another, if needed. Our free advisor match tool can help you here. There is absolutely no pressure to hire the first person you talk to. So, take your time and keep asking questions. As Albert Einstein once said, "The important thing is not to stop questioning”.