8 Questions To Ask A Financial Advisor

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Searching for the right financial advisor can be an extremely tiring process. Unless you’ve worked directly in the industry yourself, it can be difficult differentiating the good advisors from the bad.

The reason for that is because there isn’t just one, single thing that makes an advisor good or bad. There are several factors to consider when trying to separate the two. To help jumpstart your search for the perfect financial advisor, start with these 8 questions to ask a financial advisor and pay close attention to how they answer.

The Questions to Ask A Financial Advisor Are:

1) Why should I choose to work with you over other advisors? What kind of client experience do you create that others don’t?

Anyone can say, “I’m committed and I know what’s best for you.” It’s very easy to say that, but how do you know that your financial advisor means it? Well, for starters, if a financial advisor hasn’t taken the time to invest into their own education—which I’ll touch further on in a minute— it’s a red flag that they, in fact, don’t know what’s best for you because they don’t know everything there is to know! That’s only one factor to consider.

Ask your advisor what makes his or her experience unique and pay attention to the answer. At my firm, my clients tell me that they feel the professionalism and expertise of a huge corporation with the comfort and accessibility of a mom-and-pop shop. That’s what sets apart our client experience from others.

2) Do you invest in your own education?

The more committed an advisor is to his or her own education, the more committed they are to you. You want to work with an advisor who makes it a point to stay informed and up-to-date on the latest trends, strategies, etc. And it takes more than a Google search to do that successfully. It requires ongoing training in which your advisor should voluntarily choose to invest.

Things are constantly changing in the world of finance, and, if you work with an advisor who can’t keep up, you risk falling behind.

3) After I buy a product from you, will I still be able to meet with you?

You don’t want to work with an advisor who is just out for your money. You want to work with an advisor who is actually committed to doing what’s best for you. An advisor who is truly committed to you will be just as available after you buy a product as he or she was before.

4) What do you specialize in?

This is a really important question to ask, especially if you’re out to accomplish a specific goal. It is particularly important for people who are looking for retirement advice. Many advisors will claim that they have the best retirement planning strategies, but the best advice and strategies actually come from those who specialize in it. If you needed heart surgery, would your primary care physician be the one to preform the procedure? No, a specialist would. You can read more about specialists vs. generalists here.

5) Have you written a book? Do you have any other resources you’ve created that you can share with me?

I know for me, personally, this would be a deal breaker. That’s why I’ve published a book and I’m in the process of writing another. I also create short, easy-to-read reports that highlight specific topics. I’m always striving to create fresh content to continually educate the public. I believe that knowledge is power, and I want to give my clients the power to make the best decisions for themselves. The best way I know how to do that is through constant education.

6) What happens to my money and account if something unexpectedly happens to you?

An advisor who is committed to you for the long haul will be able to answer this question with ease. They’ll have a plan in place and they’ll make sure you’re well taken care of in the event that they are no longer here to do it themselves. Click here to read more about what happens to your money if your financial dies.

7) What are your credentials? Do you have additional licenses/designations that may set you apart?

You want to work with an advisor who has reached a high level of proficiency in their field. Ask him or her to explain their designations to you and why it sets them apart from other advisors. If they can’t do this, it may be time to move onto an advisor who can.

8) Are you a fiduciary?

Investopedia.com defines a “fiduciary duty” as “one of the most important professional obligations. It basically provides a much-needed protection for individuals or businesses that enter into various types of legal and financial contracts with other entities. Without it, there is nothing preventing one party from unfairly benefiting from a business relationship at the expense of the other party. Fiduciary duty refers to the legal obligation of one party to act solely in the interest of another party… The fiduciary must avoid any conflicts of interest that may impede his ability to fulfill his obligation to the principal.”

The reason this is such an important question to ask is because, “unlike attorneys, financial advisors are not required to be registered, so many are not bound by fiduciary duty. Instead, they are only required to recommend financial products that are ‘suitable’ for their clients but not necessarily in their best interest.”[1]

This is just a short list of questions that you should be asking every financial advisor, but each and every one of these questions is extremely important. Pay close attention not only to the answers to the questions, but also the way in which the questions are answered. Paying attention to both of those things can reveal a lot about the competency of financial advisor.

In the end, the most important thing is that you work with a financial advisor with whom you’re comfortable, and one that has your best interest in mind no matter what. Asking these 8 questions will give you a good jumpstart on making that happen.


[1] http://www.investopedia.com/ask/answers/091815/why-fiduciary-duty-so-important.asp