11 Important Questions to Ask a Financial Advisor Before Hiring One
Written by
Rudri Patel
Edited by
Elizabeth Constantineau
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Choosing a financial advisor is an important step in managing your money and planning for the future. Whether you’re focused on retirement, investing or long-term goals, asking the right questions upfront can help you find the best fit. These 11 questions will guide your first meeting and help you make a choice.
Don’t Miss These Key Questions When Hiring a Financial Advisor
- Are you a fiduciary?
- How are you compensated?
- What services do you provide?
- What experience do you have with clients like me?
- What is your overall investment approach?
Before You Hire a Financial Advisor: Know Your Financial Goals
You have to know what you need from a financial advisor before you can find the right fit. Do some preparation beforehand so you can make the most of your time while trying to hire a financial advisor for your portfolio.
Here are the questions you should consider:
- Do you need help with budgeting, investing retirement planning or tax strategies?
- Are you preparing for major life events like buying a house, saving for your child’s education or managing an inheritance?
- Would you prefer ongoing financial guidance or are you looking for one-time advice?
11 Questions to Ask a Financial Advisor Before Hiring Them
The best way to evaluate a financial advisor is to ask about their experience, values and approach. These 11 questions to ask a financial advisor will help you decide if they’re the right fit for you.
1. What Are Your Qualifications?
Ask about their credentials, licenses and how long they’ve been advising clients. This ensures they meet industry standards and have the experience to back up their advice.
- Follow-up questions to ask:
- What licenses and certifications do you hold?
- Are you a CFP or CFA?
2. Are You a Fiduciary?
One of the most important questions to ask a financial advisor is if they work as a fiduciary. A fiduciary is legally obligated to act in the best interest of the client.
Working with a fiduciary gives some investors peace of mind. They trust their advisor to suggest products that benefit the client and don’t just pad their commission check.
- Follow-up questions to ask:
- Are you a fiduciary at all times or under certain instances?
- Do you receive any compensation for financial products you recommend?
3. Do You Have any Disclosures?
A financial advisor with a history of complaints and disciplinary action is not a good pick. To be on the safe side, don’t take a potential financial advisor’s word for it that they don’t have any negative marks on their record.
- Follow-up questions to ask:
- Can I speak to long-term clients as a reference?
- Have you been subject to any regulatory investigations, fines or complaints?
- Can you explain the context of any disclosures on your record?
4. What Services Do You Provide?
Financial advisors offer services ranging from one-time financial plan reviews and consultations to active investment management. They may also concentrate their services on a particular sector, like investments or money management.
- Follow-up questions to ask:
- Can you create a full financial plan even if I don’t invest with you?
- What areas do you specialize in?
- How often will we meet to review or adjust my plan?
5. What Clients Do You Specialize in Serving?
Asking this question will help you find a financial advisor who is experienced in providing assistance with the specific financial goals you have or will have.
- Follow-up questions to ask:
- Can you share examples of typical goals you helped current or past clients achieve?
- Do you have experience working with clients in my income or asset range?
- Do you specialize in any specific financial niches?
6. How Are You Paid?
Financial advisors are paid in one of three models:
- Commission based
- Fee-only
- A combination of the two
Make sure you clarify how payment works before agreeing to work with a certain financial advisor.
- Follow-up questions to ask:
- What is your exact fee structure?
- Do you charge more if my assets grow or drop?
- Do you receive commissions or other incentives for financial products that you recommend?
7. How Much Will I Pay You and What Are the Fees?
After you find out how the financial advisor is paid, it’s important to also ask about the total cost of services so there are no surprises.
Investments incur various costs, including management and administration fees, expense ratios, transaction costs and account maintenance fees.
- Follow-up questions to ask:
- Can you break down all the costs I’ll pay annually — including advisory fees, fund expenses and platform charges?
- Are your fees tiered or flat?
- If my assets grow, will the percentage I pay go down?
- Are there any one-time setup fees, trading fees or custodian fees I should know about?
8. How Will You Choose and Explain Investments in My Portfolio?
A financial advisor’s investment philosophy can give you insight into how he or she will handle your investments and allow you to determine whether that philosophy will align with your risk tolerance.
- Follow-up questions to ask:
- How would you describe your investment philosophy for clients, and what influenced it?
- How will you ensure that your approach remains aligned with my goals and risk tolerance — especially when market conditions change?
9. How Often Do You Connect With Your Clients?
Communication is the key to any successful relationship, including the one you have with your financial advisor. You want someone who attends to your needs and answers your questions.
- Follow-up questions to ask:
- Do you schedule regular check-ins or are meetings only by request?
- What is the best way to communicate with you?
- How quickly do you respond to questions?
- How do I communicate with you if something urgent comes up?
10. Do You Work With Attorneys or CPAs?
If you have other professionals you work with for investment and retirement planning, you’d like for your financial advisor to collaborate with these individuals.
Ask your financial advisor if they are open to working with people on your team.
- Follow-up questions to ask:
- Do you already have CPAs or attorneys that you work with?
- Have you worked with other professionals to coordinate strategies like tax-loss harvesting, estate planning or trust setups?
- How do you share information with external professionals?
11. What Happens If You Leave or Retire from the Firm?
It is important for you to know the next steps if your financial advisor leaves or retires from the firm. You want to know how your portfolio will be handled and if you have a say on the new financial advisor responsible for your account management.
- Follow-up questions to ask:
- Who will take over managing my account if you leave or retire?
- Will I be notified in advance and can I have a say in the advisor that replaces you?
How Advisors Get Paid: Compare Fee Models
Understanding how a financial advisor gets paid can help you avoid hidden fees and choose a model that fits your needs.
| Fee Model | Description | Pros | Cons |
|---|---|---|---|
| Fee-Only | You pay a flat rate or percentage of assets managed | Transparent and free of product sales | Can be more expensive upfront |
| Commission-Based | Advisor earns from selling financial products | Lower upfront cost | Possible conflict of interest |
| Fee-Based | Mix of fees and commissions | Offers more flexible arrangements | Conflicts of interest still exist |
How To Find a Financial Advisor That Fits Your Needs
What’s the best way to find a financial advisor? Here are a few tips to find a financial advisor that speaks to your needs.
- Use databases. NAPFA, CFP Board and XY Planning Network are some of the databases you can search to find a potential financial advisor.
- Use an automation approach. Consider robo-advisors for smaller portfolios.
- Word of mouth referrals. Ask for referrals from friends or your employer.
- Be selective. Interview at least 2 to 3 advisors before deciding.
FAQ
Here are the answers to some of the most frequently asked questions about finding a financial advisor.- What is the most important question to ask a financial advisor?
- Start by asking if they're a fiduciary. This means they're legally obligated to put your best interests first.
- How do I choose a financial advisor for the first time?
- Begin by outlining your financial goals. Then, look for an advisor whose qualifications, services, fee structure and communication style match what you need.
- Is it worth paying for a financial advisor?
- Yes, especially if you're managing investments, planning for retirement, handling taxes or dealing with complex financial decisions.
Cynthia Measom contributed to the reporting for this article.
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Key Questions to Assess Qualifications and Experience
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Understanding the Advisor’s Investment Philosophy
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Questions on Portfolio Management and Asset Allocation
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Preparing for Life Changes: Flexibility and Adaptability
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- Investment Adviser Public Disclosure. " Investment Adviser Public Disclosure."
- U.S. Securities and Exchange Commission. "Ask Questions"
- U.S. News. 2021. "Questions to Ask Advisors on Their Investing Strategy."
- Fidelity. "What Is a Robo-Advisor? | Robo vs Hybrid Robo-Advisor."
- Wealthtender. "What Is a Virtual Financial Advisor (and Why You Should Consider Hiring One)."
- U.S. News. 2024. "Pros and Cons of Using a Fee-Only Financial Planner."
- Gold Metal Waters. 2022. "13 Questions to Ask Before Choosing a Financial Advisor."
- Bank of Sun Prairie. "Key Questions to Ask a Financial Advisor Before Your Hire Them."
- Consumer Financial Protection Bureau. 2023. "What is a fiduciary?"
