How to Interview a Financial Advisor

When someone reaches the point when they need financial advice, the idea of interviewing a professional is intimidating.  For many years, we met with people who admitted that they did not know what to ask and were making decisions on hiring someone based on their gut.  You can imagine the risk in that.  The advisor who is hired may be the most charismatic salesperson, but are they the best fit? 

As a tool for people who might want to interview our firm, or anyone else for that matter, we created a list of questions for a prospective client to ask an advisor.  The questions cover the business model, credentials, compensation, and expertise of the person to whom they would entrust their financial future.  After comparing answers, the family can at least know that they have made an apples-to-apples comparison of different firms. 

Questions for a Financial Advisor

  • Are you a Fiduciary, required to provide advice in my best interests at all times?
    • Registered Investment Advisor (Fiduciary Standard)
    • Broker/Dealer (Suitability Standard)
  • What type of business is your firm?
    • Corporation
    • Partnership
    • Who are the decision makers?
  • What are your credentials and experience?
    • Professional designation (CFP®, CFA, CPA, etc.)
    • Licensing, registration
    • How long have you been providing this kind of advice to clients like me?
  • Financial Planning
    • How do you incorporate the financial planning process into your services?
    • What kind of financial plan can we expect?
  • Typical Client Type
    • How many households do you work with?
    • What is the risk profile of a typical client?
    • Do you work with institutions and businesses or just families?
    • What is the financial profile of a typical client and how much have they invested with you?
  • How are you compensated?
    • Fee
    • Salary
    • Commission
  • How will we work together?
    • Who will I work with?
    • How often do we communicate and meet?
    • How is performance reported?
    • What is the size of your team?
  • How do you approach investing for people like us?
    • What types of investments do you use in your portfolios?
    • What are the costs of the investments that you use?
    • What is your philosophy?
    • Who makes the investment decisions?
    • How frequently do you trade?
  • Where will my assets be held?

We often talk about the importance of confidence in financial matters and what better way to start an advisory relationship than with the confidence that you have asked the right questions.

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Important Disclosures