The 19 Questions to Ask Your Financial Advisor
Questions to put to a financial advisor before you hire one, and to revisit with an advisor you already use. They cover how the person is paid, what duty they owe you, who holds your money, how the results get measured, and what happens if you want to leave.
The questions
Open any question for the note
Who are your typical clients, and what do they have in common with me?
Why ask it
An easy opener that reveals whether you would be an ordinary client or an unusual one. Someone whose practice is built around retirees will handle a business sale or a young family's cash flow less often, whatever they say about being able to.
How are you paid, and does anyone else pay you in connection with my account?
Why ask it
The second half is the part that gets skipped. Commissions, referral fees, and revenue sharing from product providers all create pressures, and an advisor who answers only about your fee has not answered the question.
What will this cost me in the first year, in dollars rather than percentages?
Why ask it
Percentages hide the size of the number and rarely include everything. A complete answer covers the advice fee, fund charges, platform or custody fees, and trading costs, and an advisor who cannot produce a total should be asked again in writing.
Are you a fiduciary at all times, and will you confirm that in writing?
Why ask it
A clean answer is yes, in writing, for the whole relationship. Watch for hedging: acting in your best interest without using the word, or being a fiduciary for advice but not for products sold alongside it.
What licences and qualifications do you hold, and where can I check them?
Why ask it
Titles like wealth manager are unregulated in most places, while designations such as CFP, CFA, and CPA have bodies behind them that can be checked. A willing answer includes the firm's registration and where the public record sits.
Has any regulator or client ever brought a complaint or action against you or the firm?
Why ask it
Uncomfortable to ask and worth asking, because you can verify it afterwards through public regulator records such as Form ADV disclosures or FINRA BrokerCheck. A discrepancy between the answer and the record matters more than the original event.
Who actually holds my money, and how would I check my balance without going through you?
Why ask it
Independent custody and statements that come from the custodian rather than the advisor are the single biggest protection against outright fraud. Any arrangement where money is paid to the advisor personally deserves a firm no.
What is your investment approach, and what would make you change it?
Why ask it
The second half separates a considered method from a story. An advisor who cannot describe conditions under which they would revise their view is describing a belief rather than a process.
How will you work out how much risk I should take?
Why ask it
Listen for whether the answer covers your actual position, such as job security, dependants, debts, and how long the money must last, or whether it stops at a questionnaire that scores you as balanced.
How much of what you would recommend is run by you or your own firm?
Why ask it
In-house products are not automatically worse, but they change the incentive. Ask what the equivalent product from elsewhere would cost and why theirs was chosen over it.
What did you tell clients during the last big market fall, and what did they actually do?
Why ask it
Asks for behaviour rather than philosophy. An advisor who can describe the calls they made, the clients who sold anyway, and what they changed afterwards has been through it and thought about it.
How will we judge whether this is working, and against what benchmark?
Why ask it
Without an agreed measure, the relationship gets judged on how the meetings feel. Ask which benchmark your portfolio should be compared with, whether the figures you receive are net of every charge, and what a disappointing but acceptable three years would look like.
How do taxes factor into what you recommend?
Why ask it
You are checking whether tax is considered before a recommendation or bolted on afterwards. Notice whether they say plainly where their advice stops and an accountant's begins.
What do you not do?
Why ask it
One of the most revealing questions you can ask anyone selling a service. Estate documents, insurance, tax filing, and lending are common gaps, and an advisor who claims to cover everything is either a firm with specialists or overselling.
How often will we speak, and who will I actually be dealing with?
Why ask it
Senior advisors often win the client and hand over the work. Ask who takes your call in a fortnight, what they are qualified to decide, and how quickly emails are answered.
What will you need from me for this to work?
Why ask it
A good answer asks for documents, honesty about spending, and notice of major changes. It also tells you whether they expect a working relationship or a signature.
What happens to my account if you retire, sell the firm, or are unavailable for a month?
Why ask it
Continuity is rarely discussed at the start and matters most when it is too late. Ask whether a named colleague can act, and whether a sale of the practice would move your account without your consent.
How would you talk me out of a bad idea?
Why ask it
You want an example, not a principle. An advisor who has never disagreed with a client is either new or accommodating, and accommodating is expensive over twenty years.
What would make you tell me I am not a good fit for you?
Why ask it
Advisors with a clear practice can answer this immediately: asset minimums, trading requests they will not take, a level of involvement they cannot give. An answer of nothing at all is a sales answer.
If I want to leave, what does that involve and what will it cost?
Why ask it
Ask before you sign, because exit costs are where surprises live: surrender charges, transfer fees, notice periods, and holdings that cannot move without being sold and taxed. A clear answer is a good sign in itself.
Choosing and checking an advisor
Practical guidance for the conversation itself
Before the first meeting
Write down what you want help with
Retirement income, a house purchase, a business sale, and untangling old pensions call for different skills. Arriving with the task named makes it easier to tell whether the person in front of you does it often.
Ask for their disclosure documents in advance
Firms that give advice generally have to publish who owns them, how they are paid, and any disciplinary history. Reading it beforehand turns the meeting into follow-up questions rather than a first pass.
Check the registration yourself
Verify the individual and the firm through the relevant public regulator record rather than the firm's own website. Do this before you disclose anything about your finances.
In the meeting
Get fees in dollars, then in writing
Ask for the total annual cost on a balance the size of yours, including fund and platform charges. If the figure only ever appears as a percentage, ask them to write out the dollar amount and keep the reply.
Ask the follow-up twice
Most of these questions have a comfortable first answer. "Can you give me an example" and "what else is included in that" are where the useful detail arrives.
Notice what happens when you say you are still deciding
A professional will send documents and follow up next week. Urgency, a limited-time arrangement, or pressure to sign at the first meeting is a reason to stop rather than a reason to hurry.
Reasons to walk away
Money paid to the advisor rather than a custodian
Cheques or transfers made out to an individual or their company, instead of an independent custodian, remove the main safeguard you have. This should end the conversation.
Returns described as guaranteed
Anything presented as a high return with no real risk is either misdescribed or not what it appears to be. Ask what the worst historic year looked like and who bears the loss.
Statements only from the advisor
You should be able to see your holdings directly from whoever holds them. Reports produced solely by the advisor's own software are not independent confirmation that the assets exist.
Reluctance to put answers in writing
Fees, fiduciary status, and scope of service can all be confirmed in an email. Someone unwilling to do that has told you something about how disputes would go.
With an advisor you already have
Re-ask the fee question every couple of years
Charges change, portfolios drift into more expensive holdings, and services quietly reduce. Compare this year's total cost with what you were told at the start.
Review after any large life change
A marriage, a birth, a divorce, an inheritance, a diagnosis, or leaving work changes what the plan should be doing. An advisor who does not ask about these is worth prompting.
Keep a note of recommendations and reasons
A short record of what was advised and why makes it possible to judge the relationship later, and gives you something concrete if you ever need to complain.