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Questions to Ask a Financial Advisor

Latest update: September 24, 2019

Visiting a financial advisor may seem intimidating, but keep in mind this is about your money and you are always in control. Expect to learn from a financial advisor and be prepared with a list of questions. Have a general idea of the value of your financial accounts and current and future goals. If you have little to nothing in savings, don’t be concerned. A financial advisor helps you build and grow your savings. Use our list of questions help you find a financial advisor who meets your expectations and ensure you understand the services offered by your financial advisor.

Questions To Ask A Financial Advisor

5 Top Questions for Financial Advisors

Ask these questions early in the meeting or before you set up an appointment. The wrong answer from a financial advisor to any of these questions should be a big red flag and make you reconsider working with them.

  1. Do I have to deposit a minimum amount in an investment account to receive financial advising?

    Some financial advisors provide services with a flat or hourly fee with no other contingencies. However, many require clients to use the firm’s investment management services. If this is the case, you need to know if you have sufficient assets to meet requirements. If no minimum amount is required, you are free to invest wherever you want while the advisor helps you choose investments. Those who participate in investment management services may receive financial planning help for free or for a flat fee.

  2. Can you provide a list and explanation of your financial advisory services on paper?

    Most financial advisors work with clients on just about any personal money management topic. Typical services include budgeting, financial planning, debt reduction, college and retirement expenses, family services and estate planning. However, some financial planners don’t assist clients beyond retirement planning. You need to know if the financial advisor you’re considering provides the services you need, both now and down the road. Ask about financial coaching or education if the information doesn’t specifically mention these services.

    While the advisor can explain available services while you take notes, most have this information in a printed form for prospective clients.

  3. Are you a fiduciary?

    The fiduciary question is included on every list of questions to ask a financial advisor, and for a good reason. A fiduciary is required only to make decisions and advise a client based on that client’s best interests. Advisors who are paid a commission on financial products recommended to clients can be a fiduciary, but this practice can cause conflicts. Registered Investment Advisors and Certified Financial Planners are required to be fiduciaries.

  4. What types of clients typically work with you?

    Knowing the types of clients a financial advisor works with helps you determine if they have experience with those who have a lifestyle and goals similar to your own. Some financial advisors only work with individuals who have particular needs. If you’re talking to one of these advisors, you want to be sure you fall into the parameters the advisor sets for clients.

  5. What is your money management philosophy? In general, how do you plan for your finances?

    You can find financial advisors who provide planning and advisory services for a flat or hourly fee. However, many require clients to keep a minimum portfolio under management with the firm. If you are looking for investment management and a financial advisor, you need to know if you have enough assets to meet requirements. If no minimum amount is required, you are free to invest wherever you see fit, and the advisor should help you with choosing investments. Those who participate in investment management services may receive financial planning help for free or for a flat fee.

3 Additional Questions To Ask A Financial Advisor

If you’re still interested in learning more about a financial advisor after vetting them, continue the interview with these questions.

  1. How do you get paid, and what fees can I expect beyond your payment?

    A financial advisor should be upfront about how they get paid. Some provide services on an hourly basis, but many have varying levels of packaged services rendered for a flat fee. Some financial advisors get paid a percentage of clients’ investment portfolios and others who work purely on commissions. A good financial advisor is not inexpensive, but you need a provider who is within your budget.

    If you invest with your advisor, there are likely additional fees when you make trades, like mutual fund loads. Some firms figure these costs into the financial advisor’s fees, but most don’t.

  2. How long have you been working as a financial advisor, and what are your certifications?

    Most financial advisors have access to very robust software to assist with financial planning and managing savings and investments. If an advisor you are interviewing doesn’t have years of experience, there’s likely no cause for concern. However, if you can’t be comfortable with anything other than a seasoned financial professional, you need to know how long the advisor has worked in the field. Be sure to take note of the financial advisor’s certifications and experience to ensure you can trust the advisor.

  3. How many clients do you have right now?

    A financial planner with over 100 clients sounds impressive and experienced. However, the time available to answer client questions or update plans can become limited with a heavier client load.

Questions About Working with a Financial Advisor

Will I work solely with you on financial planning, or with your associates as well?

Most people like to work with one financial advisor who gets to know them over time. Many financial advisory firms shuffle clients between multiple advisors depending on which one is available. If you won’t need your advisor often, this probably isn’t much of a concern. However, if you’re looking for one-to-one service, be sure you’ll have access to your preferred professional.

How often would we communicate, and by what method?

You need to know if you feel comfortable with the typical communication method a financial advisor uses. There should be a few meetings before the advisor designs your financial plan. It takes time to gather information and consider the best options for your financial future. The only exception is seeing a financial advisor for help with just one area, like choosing retirement investments or a strategy for getting out of debt.

How will you teach me about managing my finances and investments you recommend?

Your financial advisor needs to be your teacher and should be able to explain the investment process. Don’t invest time or money in something you don’t understand, and ask questions until you’re comfortable with a suggestion. Find a financial advisor who is a teacher and not a salesperson.

One Last Question

Is there one or more questions should I have asked?

Asking this question is an excellent way to determine how interested the financial advisor is in your business and if they are an educator. You are reading this right now because you are unfamiliar with what you need to know about financial advisors before choosing to work with one. There is likely something the advisor thinks is essential that you didn’t ask about, so find out what those questions are.

Finding the Right Financial Advisor

Asking a financial advisor these questions ensures your money is effectively managed and financially secure for years to come. How the financial advisor answers these questions helps you determine if they are interested in how well you understand their advice and if your personalities are compatible. Most people work with a financial advisor for several months or years, so taking the time to interview a few financial advisors in your area is well worth your time, to ensure you feel comfortable with an advisor and trust they are committed to protecting and growing your principal.

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