What to Ask When Interviewing a Financial Advisor

When interviewing a financial advisor, it's essential to ask a series of thoughtful questions to ensure they are the right fit for your financial goals and needs.

“Financial Advisor” is an unregulated title used by various professionals, so it’s important to do your due diligence before trusting your life savings with just anyone. For example, you might be looking for a professional who will help you with tax-efficient retirement planning, but you might instead unknowingly meet with a financial advisor who is primarily focused on selling life insurance.

Our hope is that the following series of questions will help you find the advisor who will best fit your financial planning needs. That said, here are some top questions to consider:

1. Credentials and Experience:

   • What are your qualifications and credentials? Are you a Certified Financial Planner (CFP®), Chartered Financial Analyst (CFA), or have any other relevant certifications?

   • How many years of experience do you have in financial planning and advising? Do you plan on retiring before I do?

2. Specialization:

   • Do you specialize in any particular area of financial planning, such as retirement planning, investment management, or estate planning?

   • Can you provide examples of clients with similar financial goals and situations whom you have successfully helped in the past?

3. Fees and Compensation:

   • How do you charge for your services? Are you a fee-only fiduciary, a commission-based sales representative, or a combination of both (fee-based)?

   • Can you clearly summarize your fees and any potential conflicts of interest?

4. Investment Philosophy:

   • What is your investment philosophy? How do you approach risk and asset allocation?

   • Can you explain your strategy for managing investments and achieving client goals?

5. Clientele and Availability:

   • What types of clients do you typically work with, and do you have experience with clients in a similar financial situation as mine?

   • How often will we meet, and what methods of communication do you prefer?

6. Financial Planning Process:

   • Can you describe your financial planning process from initial assessment to ongoing reviews and adjustments?

   • How do you tailor your recommendations to individual client needs and goals?

   • Do you offer comprehensive financial planning services that go beyond investment management, such as tax planning, retirement planning, and estate planning?

7. Regulatory Compliance:

   • Are you a registered investment advisor (RIA)? Can you provide information about any regulatory actions or disputes in your professional history?

8. Client References:

   • Can you provide references from current or past clients who can vouch for your services and results?

9. Fiduciary Responsibility:

   • Are you held to a fiduciary standard, meaning you are legally obligated to act in my best interests? If not, can you explain why not?

10. Situational Questions:

    • How do you handle market downturns or economic crises concerning client portfolios?

    • What is your approach to tax-efficient investing and estate planning?

11. Exit Strategy:

    • What happens if I am not satisfied with your services? What is the process for terminating our relationship?

12. Disclosure of Conflicts:

    • Can you disclose any potential conflicts of interest that might impact your recommendations or financial products you recommend? If you receive commissions for selling insurance or certain investments, how can I expect this to influence the advice you provide?

It's essential to take your time during the interview process and select a financial advisor with the necessary expertise that aligns with your financial goals and values. Consider interviewing multiple advisors to compare their responses and make an informed decision.