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Knowing is Half the Battle: Important questions for your future Advisor

Updated: Dec 20, 2023

Now that you've identified a list of potential financial advisors that align with your needs, it's time to take the next step: reaching out and setting up appointments. This stage is crucial in finding the right advisor to entrust with your financial future. When meeting with potential financial advisors, it's essential to gather as much information as possible to make an informed decision. After all, your financial well-being and life's savings are on the line. Don't hesitate to ask for the details you need, whether it's about their credentials, pay structure, or how they operate.

Here are some important questions you can ask:

  1. Who Are Your Typical Customers? Understanding the advisor's typical client profile can help you determine if they have experience dealing with situations similar to yours.

  2. How Will We Communicate with Each Other? Establishing clear communication expectations is vital for a productive advisor-client relationship.

  3. How Much Will I Pay, and How Is That Number Determined? Knowing the cost of their services and how they calculate fees is essential for budgeting and financial planning.

  4. How Are You Compensated? Understanding how the advisor earns money is crucial. This question will shed light on whether they are fee-based, commission-based, or operate on a different compensation model.

  5. Are You Compensated for Recommending Certain Products? This question helps you identify any potential conflicts of interest that might influence their recommendations.

  6. How Do You Choose Investments and Products for Your Clients? If Charged an Annual Percentage, Will It Be Billed Quarterly or Monthly? Understanding their investment selection process and payment frequency can provide clarity on how your financial plan will be executed.

  7. Do You Charge by the Hour? Hourly rates can affect the cost of your financial advice, so it's important to know if this is how they structure their fees.

  8. Do You Have a Fiduciary Duty to Your Customers? Finding out if the advisor is held to a fiduciary standard means they are legally obligated to prioritize your best interests.

Tailoring Questions to Your Specific Situation

In addition to these general questions, tailor your inquiries to your unique financial circumstances:

  • If you are new to financial planning, ask if the advisor has experience working with clients in a similar situation.

  • If you're a small business owner, inquire about their expertise in handling small business-related financial matters.

  • If you're a gig economy worker seeking tax advice and wealth-building strategies, check if they have a track record of assisting clients in similar positions.

People will travel to faraway gas stations or appliance stores to find the cheapest gas, appliances etc. They’ll spend hours at car dealerships before buying a car. But they’ll rely on a quick Google search to find the right financial advisor.

You should spend the same amount of time doing your advisor homework before giving somebody your hard-earned money.

An advisor who is hesitant to discuss the above details may not be the right fit for your needs. It's crucial to choose an advisor who is transparent about how they will manage your finances and is willing to address any questions or concerns you may have. Your financial advisor is your partner on the path to achieving your financial goals, so make sure you feel confident in their ability to guide you effectively.


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