What questions should I ask a financial advisor?

Summary 

20 questions to ask a financial advisor 

These 20 questions to ask a financial advisor can help you distinguish good advisors from subpar ones, ensuring that your money matters are handled with the highest level of professionalism and care possible.  

1) What are your qualifications? 

Good financial advisors will always be qualified for the job. Some qualifications to look out for include Chartered Financial Consultant (CFC), Certified Financial Planner (CFP), and an appropriate license from FINRA, which are all green flags.  

2) What services do you offer? 

The services offered by financial advisors vary from firm to firm. Asking which services they offer or specialize in can help you determine if they’re a good fit for your needs.  

2) How much do your services cost? 

Financial advisor costs also vary from firm to firm, as does the fee structure they follow. Ask about commissions, fee structures, asset under management (AUM) percentages, and any other relevant costs that you will incur for their services. 

4) Are you a fiduciary? 

Fiduciaries are legally compelled to act in their client’s best interest, whereas a financial advisor is a job title that anyone offering professional financial advice can hold. 

5) What will our working relationship be like? 

Some financial advisors offer personalized, ongoing guidance, whereas others offer their services on a once-off or impersonal basis. 

6) Who is your custodian? 

A financial advisor’s custodian is the bank that holds their client’s financial assets for safekeeping. You should choose a financial adviser whose custodian you trust with your finances.  

7) How will you align my investment strategy with my financial goals? 

It is your prerogative to determine how your financial advisor intends to bring your financial goals to life. What strategies, philosophies, and practices do they follow?  

8) How do you allocate assets? 

Asset allocation is the process of implementing an investment strategy based on the risk versus reward ratio. If your financial goals relate to investments of any kind, this is a key piece of information to obtain. 

9) What are your values and principles as an advisor? 

You can tell good financial advisors by which principles and values they are guided by as professionals. Honesty, client goal prioritization, risk rationality, and maintaining a high level of industry knowledge are all indicators of a trustworthy advisor.  

10) Who is your ideal client? 

The closer you are to a financial advisor’s ideal client, the more adeptly they will be able to accommodate your needs.  

11) What are my all-in costs? 

All-in costs are the total costs of a financial transaction or business operation. You need to know what total costs you will be required to pay in exchange for access to your personal financial advisor’s services.  

12) What benchmarks do you use? 

Financial advisors use benchmarks to measure investment portfolio performance, such as the S&P 500 index.  

13) If you’re not independent, can you look at products from across the market? 

If you intend on investing in lateral industry products, the financial advisor you settle on needs to be able to accommodate that.  

14) Do you have many clients who are similar to me? 

Identifying a financial advisor’s other typical clients can help you determine their priorities and areas of expertise.  

15) How am I protected? 

Good financial advisors will always offer comprehensive data and privacy protection services for their clients. Their answers to this question should be firm and assuring.  

16) What is your net promoter score? 

A net promoter score (NPS) is a market research metric used to determine how likely a client is to recommend a firm or advisor to friends and family. The score system ranges from -100 to +100, making anything above 30-50 a very good score.  

17) Are there any tax implications if I invest with you? 

Soliciting financial advice from certain professionals or firms can result in tax deductions. Finding out which tax implications, if any, might apply to you is crucial.  

18) How can external factors affect my money? 

External factors such as economic conditions, inflation, and unemployment rates can all impact your investments. Your financial advisor's costs may also be subject to change. However, this should be explained upfront.  

19) How will we communicate, and how often? 

Some financial advisors exclusively communicate remotely via digital platforms, while others offer flexible or in-person meetings. The frequency and length of communication can also vary from advisor to advisor.  

20) How will you track my financial progress? 

While digital systems are most common for tracking financial services, it is still important to know how your personal financial advisor will measure and interpret your performance data over time.  

Get expert financial advice  

It’s important to be as prepared and informed as possible when it comes to consulting with a prospective financial advisor.  

These 20 questions to ask a financial advisor can help you identify the best person for the job and ensure that your hard-earned funds are handled adeptly.  

Let Unbiased match you with an SEC-regulated financial advisor who can offer expert advice and guidance for managing your money and meeting your financial goals.