Questions to Ask a Financial Advisor Before Hiring Them

You’re ready to make changes to help you achieve your financial goals and want to seek the expertise of a financial advisor. Below are questions to ask a financial advisor to confirm their methods align with your financial needs.

8 Valuable Questions to Ask a Financial Advisor

1. What are Your Qualifications and Credentials?

Unfortunately, some people call themselves financial advisors who have no business doing so. Social media makes it increasingly easy for anyone to present themselves as an expert.

You can check your advisors background through the FINRA Broker Check to check their registrations as well as their disciplinary history. It is important to verify the professionals that you engage to manage your financial plan and assets.

2. What Services Do You Offer?

Inquire about the services and products that the financial advisor provides to their clients. You’ll want to know if their offerings are right for your specific needs and preferred risk level.

3. Are You Working Under a Fiduciary Capacity?

A financial advisor who works under a fiduciary capacity is required by law to prioritize their clients’ best interests. Therefore, they’re not permitted to earn commission on any investment products that they recommend to their clients. Some advisors can operate solely as a fiduciary, a registered representative, or as a hybrid. This helps to ensure that the recommendations you receive reflect your financial comfort level.

4. How Long Have You Been Helping Clients?

Of all valuable questions to ask a financial advisor, asking how long they have been in business is essential. You want your advisor to have at least four years of experience assisting clients through periods of market volatility.

It’s easy to be a successful financial advisor when the market is up, but the real test is helping clients achieve their financial goals when there’s market uncertainty or a bear market. This shows that they are seasoned and can successfully manage tough times.

5. What’s Your Preferred Type of Asset?

A financial advisor may prefer to use a certain type or mix of assets to aid their clients with meeting their goals. Make sure that you’re comfortable with their suggested products and asset allocation.

Tell your advisor if you feel like a product is too risky or doesn’t align with your goals; they should be able to suggest other products that better fit your needs. An advisor should never pressure you into taking on more risk than you’re comfortable with.

6. What Approach Do You Take to Financial Planning?

Look for an advisor that will take an approach that fits your personal preferences. Some people place a premium on returns, while others like to examine the whole picture when selecting investments.

For example, if you prefer to invest in companies that follow ethical principles or support specific causes, you’ll want an advisor who respects your wishes and can make suggestions that follow your guidelines.

7. Who Will Serve as My Primary Point of Contact?

It’s common for financial advisors to have a staff to support them. You should see how often you’ll deal with the advisor versus the other members of their team.

While it’s fine for staff to handle paperwork and other tasks, you want the security of knowing that you’ll be dealing with your financial advisor, when you have questions. Not only is consistency an indication of reliability, it is essential during times of market instability.

8. Who Is Your Typical Client?

Your advisor should have experience advising individuals who have similar goals or asset levels. You want an advisor who’s familiar with clients with needs that resemble your own.

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