Questions to Ask Your Financial Advisor
Questions to ask a financial advisor before you hire one, and to bring to your financial advisor at each review afterwards. They run in six groups: vetting, fees, investing, planning, day-to-day service, and the regular review. Each has a note on what a full answer or an evasive one sounds like, and what to ask next. Rules on duty of care, fees and client protection differ by country, so where a note mentions one, ask how it works where you live.
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The questions
Each question, and why to ask it
Vetting
Are you a fiduciary on everything you do for me, or only on some of it?
Why ask it
Some advisors owe that duty on a managed account and a lower standard when they sell a product beside it, so a useful answer says which applies when. Ask for it in an email. The word and the legal duty behind it differ by country, so ask what standard covers them where you live.
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 are all ways of being paid by someone other than you, so an answer that covers only your own fee is half an answer.
What services do you provide, and which of them does your fee cover?
Why ask it
Financial advisor is a broad label: some manage investments and nothing else, and others also plan for retirement, tax, insurance and estates. Have them list what they would do for you in a typical year, then ask which items sit inside the fee and which are billed separately or referred out.
What licenses and qualifications do you hold, and where can I check them?
Why ask it
A title such as wealth manager may mean little on its own, and whether it is protected depends on where you live. Designations such as CFP, CFA and CPA come from bodies that keep a register you can search, so ask for the exact name they are listed under and look it up afterwards.
Has any regulator or client ever brought a complaint or action against you or the firm?
Why ask it
Uncomfortable to ask, and one of the few answers you can check. In the United States the record is public through FINRA BrokerCheck and the firm's Form ADV, and other countries keep their own registers. An old complaint explained plainly is one thing, and a record that does not match what you were told is another.
Who actually holds my money, and how would I check my balance without going through you?
Why ask it
The usual arrangement is an independent custodian that holds the account in your name and gives you its own statements and login. If money you are investing would be made out to the advisor or to a company they control, stop and ask why before anything moves.
What conflicts of interest do you have, and where are they written down?
Why ask it
Most ways of charging carry one: a percentage fee rewards keeping your money under management, and a commission rewards a sale. Sales targets, bonuses for placing certain products and ties to a parent company belong on the list too. An advisor who names theirs and points to the page in the disclosure is easier to trust than one who says there are none.
Who are your typical clients, and what do they have in common with me?
Why ask it
An easy one to ask early, and it shows whether you would be an ordinary client or an unusual one. A practice built around retirees sees a business sale or a young family's cash flow less often, however willing it is to take you on.
Can you trade in my account without asking me first?
Why ask it
Discretion is common and convenient, but you should know which arrangement you are signing. Ask where the limits are, how you would hear about each trade, and whether money can ever be sent anywhere other than an account in your own name.
What protects me if the firm fails or makes an error with my account?
Why ask it
Two different things sit inside this question: any scheme that covers client assets if the custodian goes under, and whatever insurance the firm carries for its own mistakes or theft. Both vary by country and neither covers market losses, so ask which apply to you and what the limits are.
How long have you been advising clients, and what did you do before?
Why ask it
Which years matter more than how many. Ask whether they were advising through a serious downturn, and notice whether an earlier career selling insurance or funds still shows in what they reach for first.
Why did you become a financial advisor?
Why ask it
A soft question, and the answer is harder to rehearse than the ones about fees. A parent caught out by bad advice, or a liking for the planning side of the work, tells you what they think the job is. If the story is all markets and no clients, expect the meetings to run the same way.
How many clients do you look after personally?
Why ask it
Get the number, then divide a working year by it. Several hundred households and sixty are different services, and the follow-up is who else on the team would know your file.
What is your minimum account size, and how are clients near it looked after?
Why ask it
Some firms set a minimum balance and others a minimum annual fee, which on a small account works out as a higher percentage. Near the bottom of the range you may be given a junior colleague and a standard portfolio at the full price, so ask who would handle the account and what gets left out at your size.
What would make you tell me I am not a good fit for you?
Why ask it
A practice with a clear shape answers this at once: an asset minimum, trading requests it will not take, a level of hand-holding it cannot give. "Nothing, we work with everyone" is a sales answer.
Can I speak to one or two clients who have been with you for several years?
Why ask it
Anyone offered will have been picked for you, so use the call for detail and not for a verdict: how quickly calls are returned, what happened in a bad year, whether a bill ever surprised them. Some firms decline for privacy or because of rules on testimonials where they work, which is a fair answer if they give the reason.
Fees
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 tend to leave things out. A full answer adds up the advice fee, fund charges, platform or custody fees and trading costs on a balance like yours. If no total comes, ask for one by email.
Would you call yourself fee-only, and what exactly do you mean by that?
Why ask it
Fee-only and fee-based sound alike and get used loosely. In common US usage the first means paid only by clients and the second means fees plus commissions, but have them define the term themselves and then compare it with the firm's disclosure documents.
Would you earn more if I picked one of your recommendations over another?
Why ask it
The conflict question made specific: a choice in front of you, not a policy. Rolling a workplace plan into an account they manage, or picking an insurance product over a plain fund, can change what they take home. A plain yes with the amounts is a better sign than a no that needs three follow-ups.
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 are the ongoing charges on the funds you would put me in, and is there a cheaper version of the same fund?
Why ask it
Fund costs come out of the return before you see it, which makes them easy to leave out of the conversation. Many funds are sold in several share classes at different prices, so ask which class you would hold and why.
Does your percentage fall as my balance grows, and where are the breakpoints?
Why ask it
A tiered schedule should exist on paper. Ask whether the lower rate applies to the whole balance or only to the slice above each threshold, because the two produce quite different bills.
Do you charge on money you are not managing, such as cash, a workplace plan, or an account I keep elsewhere?
Why ask it
What the fee is calculated on matters as much as the rate. Some firms bill on everything they advise on and others only on the accounts they run, and a large cash balance charged at the full rate is worth querying.
How and when is your fee collected, and where will I see it?
Why ask it
A fee taken straight from the account each quarter is painless, which is also why people stop noticing it. Ask to be shown the line on a statement, and whether billing is in advance or in arrears, which matters if you leave partway through a period.
In what circumstances could your fee go up, and how much notice would I get?
Why ask it
The client agreement usually has a clause on how charges can change, and it is rarely the page anyone reads. Have them point to it, then ask when existing clients last saw an increase and how they were told.
Is there any room on the fee for an account like mine?
Why ask it
Some firms will move and some will not, and you only find out by asking. If the answer is no, ask what could come out of the service to bring the price down, which also shows you what each part is worth to them.
What would I get from you that a low-cost index fund or an automated service would not give me?
Why ask it
It is a fair challenge, and an advisor who is sure of their value will not mind it. The answers that hold up tend to be planning, tax and a steady hand when markets fall, so ask which of those you would get and how often. If the case rests on beating the market, ask to see the record after fees.
Do I have to move my investments to you to get your advice?
Why ask it
Many advisors only take on money they manage, while others will plan for an hourly rate, a flat project fee, or a retainer. If what you want is a second opinion or a one-off review, ask this early, before the conversation assumes an ongoing percentage.
Investing
What is your investment philosophy, and what would make you change it?
Why ask it
Most advisors can recite the first half. The test is the second: someone with a method can name what would change their mind, such as your circumstances, costs, or a holding that no longer does its job. A flat refusal ever to change and a habit of changing with the headlines both deserve a follow-up.
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, dependents, debts, and how long the money must last, or whether it stops at a questionnaire that scores you as balanced.
What return is it reasonable to expect from a portfolio like mine, after fees and inflation?
Why ask it
Nobody can know, so a careful answer comes as a range with the bad end included, and says what it assumes. A single confident figure, or any promise that the money cannot fall, is a reason to slow down. Write down the number you are given, since the plan will be built on it.
Would my portfolio be built for me, or would I go into one of your model portfolios?
Why ask it
Models are a reasonable way to run money and plenty of firms rely on them. The point of asking is to match the answer to the price: a bespoke fee for a standard model deserves a follow-up about what else you are paying for.
What would you do with the investments I already hold?
Why ask it
Selling everything and starting again is tidy for the advisor and can leave you with a tax bill. The better sign is a question back: what you paid, and which type of account each holding sits in.
Do you favor index funds, actively managed funds, or individual stocks, and why?
Why ask it
There is a reasoned case for each, so you are listening for the reasoning and not for a correct answer. Ask what their active choices have returned after costs, and how they decide when to give up on one.
How often do you rebalance, and what triggers it?
Why ask it
A fixed schedule and a tolerance band are both clear answers. "When the market calls for it" is a forecast by another name, so ask how those calls have gone.
What is the worst year a portfolio like this one has had?
Why ask it
Ask for it as a loss in dollars on a balance the size of yours. A percentage is easy to nod along to, and a sum of money is much closer to how the statement will read when it happens.
What did you tell clients during the last big market fall, and what did they actually do?
Why ask it
Asks for behavior, not philosophy. The detail to listen for is specific: who they phoned first, which clients sold anyway, and what they changed in their own practice afterwards.
If I gave you a lump sum, would you invest it all at once or in stages?
Why ask it
Either can be defended, and a candid advisor will say so. What you learn is whether the recommendation comes from your nerves and your timeline or from a house rule applied to everyone who arrives with an inheritance or a bonus.
Are there investments you would never put a client in?
Why ask it
A quick list shows where their judgment has edges: products with long lock-ups, anything they cannot explain in two sentences, anything that pays the seller unusually well. No list at all suggests they place whatever the firm supplies.
Can you invest in line with my values, and what would that cost me?
Why ask it
If you want to leave out certain industries or lean toward others, ask how they would do it and what those funds charge. A real answer covers the trade-offs in cost and spread, where a quick yes followed by one branded fund is a product pitch.
How much of your own money is invested the way you would invest mine?
Why ask it
Their circumstances may not match yours, so a different portfolio is not a problem in itself. What matters is whether they explain the difference comfortably and, if they own none of what they recommend, whether they can say why.
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.
Planning
Will I get a written financial plan, and what goes into it?
Why ask it
Some firms mean a real document with your numbers and assumptions in it, and others mean a portfolio proposal with a cover page. Ask to see a sample with the names removed, and how often yours would be updated.
Am I saving enough to retire when I want to, and how did you work that out?
Why ask it
Often this is the question behind the whole meeting, so it deserves a worked answer and not a reassurance. You should come away with a target, a monthly figure and the age it points to, plus the spending they assumed for you in retirement. If nobody asked what you spend, the answer is a guess.
What assumptions will you use for returns, inflation, and how long I live?
Why ask it
A plan is only as cautious as its inputs, and generous ones make every plan look healthy. Ask to see the picture again with lower returns and a longer life than the base case.
What would you want me to have in place before I invest anything?
Why ask it
The answer shows whether they plan or only invest. Cash for emergencies, suitable insurance, a will, and costly debt cleared are the usual candidates, and none of them earns an asset-based fee.
How do you help clients choose between goals that compete for the same money?
Why ask it
A deposit on a home, school costs, and retirement all want the same paycheck. A useful answer ranks them with you instead of offering a product for each, and is honest about which goal may have to wait.
Should I pay down debt before I invest more, and how would you decide?
Why ask it
Bring the interest rate on each debt, because this is arithmetic before it is opinion. A careful answer sets those rates against a realistic return after costs and tax, and asks how much the certainty of owing less is worth to you.
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.
How would you handle a workplace retirement plan you cannot manage directly?
Why ask it
A workplace plan is often someone's largest account, and it sits outside the advisor's reach. Ask whether they will advise on the fund choices inside it as part of the fee, or whether their interest ends where their management does.
Will you review my insurance, and do you sell any yourself?
Why ask it
Cover for death, illness, and lost income belongs in a plan, and it is also an area where commissions are common. If they sell it, ask for the recommendation in a form you could take to an independent broker and price.
How does estate planning fit into what you do: wills, trusts and powers of attorney?
Why ask it
Drafting the documents is usually a lawyer's work, so the useful part of the answer is what the advisor does around them. That might be noticing you have no will, keeping the way accounts are titled in line with it, or joining the meeting with the lawyer. Inheritance and tax rules differ by country and state, so ask who they would send you to locally.
Who checks that the beneficiaries named on my accounts still match what I want?
Why ask it
In many places the name on the account form decides where that money goes whatever a will says, so ask how it works where you live. A firm that checks these as routine will have a story about an out-of-date name caught after a divorce or a death.
How do you work with a couple when the two of us see money differently?
Why ask it
Plenty of couples do. If the meetings are aimed at the keener partner, the other is left unprepared should they ever have to take over, so ask how they make sure both of you understand the plan and have agreed to it.
Will you deal directly with my accountant and my lawyer, or do I carry the messages?
Why ask it
Advice that has to pass through you gets garbled on the way. Ask whether they will pick up the phone to your other professionals, whether that time is inside the fee, and how often they do it for clients now.
Which parts of my financial life do you not handle?
Why ask it
Estate documents, insurance, tax filing and borrowing are the common gaps. A claim to cover everything means either a firm with specialists on staff, in which case ask to meet them, or overselling.
Service
How often will we speak, and who will I actually be dealing with?
Why ask it
The person who wins the client is not always the one who does the work. Ask who takes your call two weeks from now, what they are qualified to decide, and how quickly emails are answered.
What do the first ninety days look like if I sign?
Why ask it
Moving accounts, gathering documents, and building the plan can each take weeks, and the order matters. A firm with a settled onboarding routine can tell you when your money would be invested and what you will be asked for in the meantime.
What do you need from me, and how often, to keep the plan up to date?
Why ask it
Expect a request for documents, an honest picture of your spending, and notice before big decisions instead of after them. If the list is short, they may be expecting a signature more than a working relationship.
What will my regular report show, and can I see a sample?
Why ask it
A sample tells you more than a description of one. Look for your own return after charges, what you paid in and took out, and the comparison you agreed on, and ask about anything you cannot follow, since you will be reading this for years.
What do you want me to call you about between meetings?
Why ask it
Some advisors want to hear about a job offer, a car purchase, or a bad night during a market fall, and some would prefer you saved it for the review. Which one you get tells you whether you are buying advice or portfolio management.
How would you talk me out of a bad idea?
Why ask it
You want an example, not a principle: the client who wanted to sell everything, or to put half their savings into one stock. Someone who has never disagreed with a client is either new or too agreeable, and too agreeable is a poor thing to pay for over twenty years.
How do you confirm that a request to move money really comes from me?
Why ask it
Thieves impersonate clients by email, so the procedure matters more than the reassurance. A careful firm calls back on a number it already holds before sending money anywhere new, and can tell you so without going to check.
Who do I complain to if something goes wrong, and what happens next?
Why ask it
Easier to ask now than when you are upset. There should be a named person other than your advisor, a written procedure, and an outside body you can go to, which differs by country, so ask which one covers you.
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.
Have you ever moved a client to a cheaper level of service because they needed less?
Why ask it
Finances get simpler as well as more complicated, and the service that suited you ten years ago may now be more than you need. A real example, such as a switch to an annual check-in or an hourly arrangement, is worth more than an assurance that they would mention it.
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.
Review
Am I still on track for the goals we set, and what has moved since last time?
Why ask it
The question a review meeting exists to answer, and it often gets lost behind market commentary. Ask for it against your own targets and dates, not against how an index did.
How have my investments done since our last review, after every fee, and how does that compare with the benchmark?
Why ask it
Three figures belong side by side: your return after costs, the benchmark's, and what you paid in or took out. New money can make a flat year look like growth, so ask for the return with contributions stripped out. One weak year proves little, and several in a row with a fresh explanation each time is the pattern to question.
What have I paid you and the fund managers in total over the past year?
Why ask it
The estimate you were given at the start was a forecast, and this is the bill. Compare the two and ask about any gap, because costs creep up through fund changes and a growing balance without anyone deciding they should.
What have you done for me this year beyond running the portfolio?
Why ask it
It need not sound hostile, and there should be a list: a tax move, a beneficiary corrected, an insurance gap closed, a poor idea headed off. A thin answer several years running is a reason to look at what the fee is buying.
Is there anything in my portfolio you would not buy today?
Why ask it
Holdings stay put out of inertia as much as conviction. This invites them to name what they would sell if tax and effort were no object, and then to explain what is stopping them.
Am I taking more risk, or less, than I need to reach my goals?
Why ask it
Portfolios drift as markets move, and the mix that suited you five years ago may now be too bold or too timid. Ask them to show the sum: the return your plan requires, and what the current mix is built to deliver.
What has changed at your firm since we last met?
Why ask it
New owners, a new custodian, a colleague leaving, or a revised fee schedule all affect you and may otherwise arrive as one line in a long disclosure. Asking at each review means you hear it from them first.
Does anything happening in the markets or the economy right now change my plan?
Why ask it
Often the honest answer is no, with a reason tied to your own dates and not to a forecast. A change is easier to accept when it follows from something about you, such as needing the money sooner than planned. Be wary when a headline becomes the opening for a new product.
I have had a big change since we last met. Which parts of the plan need another look?
Why ask it
Name the change, whether it is a baby, a divorce, a new job, an inheritance or a health scare, and let them work through the consequences aloud. A thorough review goes past the portfolio to insurance, wills, beneficiaries and cash reserves.
Are there tax moves I should make before this tax year ends?
Why ask it
Allowances, contribution limits, and the rules on losses run on the tax calendar and differ by country, so the detail is theirs to supply. The test is whether they raise it while there is time to act or mention it at the review after the deadline.
Which of last year's decisions would you now make differently?
Why ask it
A year of decisions will include a few that look worse in hindsight, and hearing them named builds more trust than a spotless record would. If the answer is always that everything went to plan, ask how they would know if it had not.
What worries you about my plan that I have not asked about?
Why ask it
This gives them permission to raise the awkward thing: you are spending more than the plan allows, one holding has grown too large, your will is out of date. It is easy for either of you to leave these unsaid to keep the meeting pleasant.
What should I be doing between now and our next meeting?
Why ask it
It ends the review with a short list in your hands instead of a general sense that things are fine. Write the list down in front of them, and open the next meeting by going through it.
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
Many regulators make advice firms publish who owns them, how they are paid, and any disciplinary history. In the United States that is Form ADV and the shorter Form CRS, and elsewhere the firm can tell you what the equivalent is. Reading it beforehand turns the meeting into follow-up questions instead of a first pass.
Check the registration yourself
Look up the individual and the firm on the regulator's public register, not on the firm's own website. Do this before you hand over anything about your finances.
Pick a dozen for the first meeting
The full list is a reference, not a script. For a first meeting take the opening six, the first three under Fees, and one each from Investing, Planning and Service that touches your own situation. Anything left over can go in an email afterwards, which also gets you the answers in writing.
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
Investment money made out to the advisor
Paying a firm its fee is normal. Money you are investing is different: it should go into an account in your own name at an independent custodian. A request to make it out to an individual or to a company they control is a reason to stop until you understand exactly where it would sit.
High returns with no risk attached
High returns promised with little or no risk is a pattern financial regulators warn about. Ask what the worst year on record looked like, who bears a loss, and where that is written down.
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
Send your review questions ahead
The Review questions land better with notice. Given a week to total your costs and check your progress, an advisor can answer in figures. Asked cold in the room, the same question gets an impression.
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. If your advisor does not ask about these, say so yourself and do not wait for the next scheduled review.
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.