Are you thinking about hiring a financial advisor but not sure where to start?

Choosing the right financial advisor is a big decision. The person you hire will help shape your financial future.

The right advisor will guide you toward smart decisions, while the wrong one can cost you time and money.

You want someone who listens to you, understands your goals, and acts in YOUR best interest. A good advisor can help grow and protect your wealth, setting you up for long-term financial security. But not all advisors work the same way.

I’ve been in this industry since 1986. I’ve seen what works and what doesn’t when it comes to selecting a financial advisor. I know the right questions to ask before you commit.

This guide will help you get clear on what to ask potential advisors during your initial meeting so you can make an informed decision.

If that’s what you’re looking for, I would guess that you might be asking yourself:

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How Do I Prepare to Speak to a Financial Advisor? 

Meeting with a financial advisor for the first time can feel overwhelming.

Maybe you’re worried about sounding uninformed, or you’re afraid of choosing the wrong advisor. That’s completely normal. Preparing ahead of time can help you feel more confident and get the most out of the conversation.

According to a national survey by The American College of Financial Services, people want an advisor who:

  • Has proven knowledge
  • Is trustworthy
  • Listens and understands their goals
  • Communicates clearly
  • Comes with positive recommendations
  • Values client input

Your biggest concerns might include high fees, bad advice, or whether an investment advisor truly has your best interest in mind. Doing your homework can help you spot red flags early.

Here’s how to prepare:

  • Define your goals. What do you want to achieve? Retirement? Investing? Reducing taxes?
  • Gather financial documents. Have a clear picture of your income, assets, debts, and expenses.
  • Know your risk tolerance. Are you comfortable with market swings, or do you prefer stability?
  • Make a list of questions. Asking the right questions will help you understand how the advisor works.

Questions You Should Ask a Financial Advisor

Now that you’re ready, let’s look at the smart questions to ask a financial advisor before you commit.

1. Are You a Fiduciary?

Not all financial advisors are required to put your best interest first. Some only have to recommend investments that are “suitable,” even if there’s a better option.

A fiduciary advisor is different—they’re legally required to put your interests ahead of their own. This is known as their fiduciary duty.

Fiduciary advisors are bound to U.S. Securities and Exchange Commission (SEC) rules, avoid conflicts of interest, and provide full transparency about fees and services. One way they do this is through Form ADV (Part 2), a document that lays out how they operate.

To keep things simple, just ask:

Do you always act as a fiduciary?

If the answer isn’t a clear “yes,” that’s a red flag.

2. What Is the Normal Fee for a Financial Advisor?

Financial advisors charge fees in different ways, so it’s important to understand how you’ll pay for their services.

Some charge a percentage of assets under management (AUM), while others charge an hourly fee or a flat rate.

Here are the main fee structures:

  • Fee-only advisors are paid directly by clients and don’t earn commissions.
  • Fee-based advisors charge fees but may also earn commissions.
  • Commission-based advisors make money from selling financial products.

A common fee is 1% of AUM per year, but rates vary depending on the depth of services provided. Some advisors lower fees for larger account balances. Others charge a flat fee for planning services.

Before you commit, make sure you fully understand how your advisor gets paid. Make a point to ask for a clear breakdown of their fee structure so there are no surprises.

3. What Are Your Credentials and Past Experience?

A financial advisor’s background can tell you a lot about their ability to guide you. Experience matters, especially when dealing with complex financial situations.

Look for advisors with recognized credentials, such as ChFC (Chartered Financial Consultant), CFA (Chartered Financial Analyst), or CFP (Certified Financial Planner). These designations require extensive training and ongoing education.

Beyond credentials, you should also ask about their experience:

  • How long have they been advising clients?
  • Have they worked through different market conditions?

A financial advisor with years of experience brings valuable insights that newer advisors may not have.

Before committing, make sure they have both the knowledge and real-world experience to help you. A long track record often means they have successfully guided clients through market ups and downs.

4. What Services Do You Provide?

Every financial advisor works differently. Some only manage investments, while others take a more complete approach. You want to know which services will be available to you before you commit.

Ask if they offer:

Make sure their services are aligned with your personal needs and goals. If something is important to you, ask if they provide it.

5. What Type of Clients Do You Specialize in Serving?

Every advisor has a different focus. Some work with business owners, retirees, or high-net-worth individuals, while others serve a broader range of clients.

You want someone who understands your unique financial journey and the challenges that come with it.

Ask who they typically work with. Do they specialize in a certain income level, profession, or stage of life? An advisor with experience helping people in similar situations as the one you're facing will be better prepared to guide you toward your goals.

6. Do You Charge Any Other Fees Beyond Your Primary Fee?

It’s important to know if there are extra costs beyond the main fee your advisor charges. This is, seriously, one of the most important questions to ask a financial advisor!

Even small hidden fees can add up over time and reduce your potential return.

Some financial advisors charge for things like:

  • Trading fees: Costs for buying and selling investments
  • Expense ratios: Management fees on mutual funds or ETFs
  • Custodial fees: Charges from the firm holding your assets
  • Hourly or planning fees: Extra charges for financial planning services

Ask for a full breakdown of all fees upfront. A transparent advisor will have no problem explaining the all-in costs of working with them.

7. Do You Require a Specific Minimum Investment Amount?

Several advisors require a minimum amount of assets before they will take you on as a client.

This is because managing smaller accounts may not be cost-effective for their business model, and certain investment strategies work best at higher asset levels.

Minimums can vary depending on the wealth management firm. Traditional advisors may seek clients who have a net worth of at least $500,000, while certain robo-advisors will accept clients with as little as $500 to invest.

Most advisors will let you know about requirements like this upfront. If you don’t meet their minimum, ask if they can still provide guidance or suggest another advisor. 

8. What’s Your Investment Philosophy?

Every advisor has a different investment philosophy, and it’s important to find one that aligns with your goals. Some focus on long-term, low-cost investing, while others actively trade to try to beat the market.

Ask how they build portfolios, manage risk, and adjust strategies over time. Do they prioritize diversification? Do they follow market trends or take a steady, disciplined approach?

A clear investment philosophy helps you understand how an advisor makes decisions with your money. If they can’t explain their investment style simply, you may want to look elsewhere.

Photo of a Financial Advisor with Client

9. How Will You Track the Performance of My Investments?

Financial advisors use different methods to measure investment performance. Some compare your returns to benchmarks like the S&P 500, while others focus on whether your portfolio is meeting your long-term financial goals.

Ask if they track performance using absolute returns, risk-adjusted returns, or other metrics. Do they factor in inflation and taxes? You need to know how they evaluate success to understand if their approach aligns with your expectations.

A financial advisor should have a clear, consistent method for tracking investment performance. And, they should be able to explain it in a way you understand!

10. Who Is Your Custodian?

A custodian is the financial institution that holds your investments. They handle trades, maintain records, and generate account statements. It’s important to know who your advisor uses, as custodians are a valuable resource that adds a layer of security and transparency.

Common custodians include:

  • Charles Schwab
  • Fidelity Investments

Ask your advisor which custodian they use and how it benefits you. A well-known, reputable custodian ensures your assets are properly managed and protected.

11. How and How Often Will You Communicate With Me?

Good communication is key to a strong advisor-client relationship. You don’t want to feel like you’re in the dark when it comes to your finances.

I’ve seen too many people come to me frustrated because their last advisor barely checked in. They didn’t know how their investments were doing or what changes were being made. That’s not how it should work.

Ask how often you’ll meet, whether updates come by phone, email, or video, and how quickly they respond to questions. A committed financial advisor will make an effort to keep you informed, and will make time for you when you need them.

12. How Often Will We Review and Update My Financial Plan?

A financial plan isn’t something you create once and forget about. Life changes, markets shift, and your goals may evolve. Regular reviews help keep your plan on track.

Ask how often your advisor updates your plan. Many review plans annually, while others adjust them quarterly or when major life events happen, like a job change, retirement, or inheritance.

A financial advisor should proactively revisit your plan, not just react when you reach out. Make sure they have a process for reviewing your progress and making adjustments when needed. That way, your plan stays aligned with your financial needs.

13. Do You Work With Accountants, Lawyers, or Other Supporting Personnel?

An effective advisor doesn’t work in isolation. They act as the central coordinator for your financial life, making sure all the pieces fit together. This helps ensure your investments, taxes, estate plan, and other financial matters are aligned.

Ask if your advisor's service model includes collaboration with:

  • Accountants and CPAs:To manage taxes efficiently
  • Estate planning attorneys: To help with wills and trusts
  • Insurance specialists: To review risk management needs
  • Business consultants: For business owners planning succession or tax strategies

An advisor who works with your other professionals can save you time, prevent costly mistakes, and create a more seamless financial strategy.

14. What Asset Allocation Will You Use?

Asset allocation is how your investments are divided among different asset classes like stocks, bonds, and cash. The right mix depends on your goals, risk tolerance, and time horizon.

A good asset allocation strategy balances growth and protection. Too much risk, and you could face big losses. Too little risk, and your money may not grow enough to meet your goals.

Ask how your advisor determines asset allocation and how they adjust it over time. A well-thought-out strategy plays a major role in whether you reach your financial goals or fall short.

15. What Investment Benchmarks Do You Use?

Investment benchmarks help measure how well your portfolio is performing. Think of them like a report card. Without one, you wouldn’t know if your investments are doing well or falling behind.

Common benchmarks include:

  • S&P 500 – Measures the performance of large U.S. stocks
  • Russell 2000 – Tracks small-cap U.S. stocks
  • MSCI ACWI – Represents global stock market performance
  • Bloomberg U.S. Aggregate Bond Index – Measures U.S. bond market returns

Ask your advisor which benchmarks they use and how they compare your portfolio’s performance. A meaningful benchmark helps you understand if your investment returns are on track.

16. What Technology Do You Incorporate in Your Process?

Technology plays a big role in wealth management today. It helps advisors manage portfolios efficiently, track progress, and keep clients informed. A modern advisor should use technology to improve accuracy, security, and communication.

Ask what tools they use, such as:

  • Portfolio management software – Tracks performance and asset allocation
  • Financial planning software – Helps model different scenarios for your future
  • Client portals – Provides easy access to your account details
  • Cybersecurity measures – Protects your sensitive financial information

A tech-savvy advisor can provide better insights and faster service, helping you stay informed and in control of your finances.

17. What Are the Tax Implications if I Invest With You?

When you become a client, your advisor may need to make changes to your investments to align them with your financial plan. Selling existing investments can create taxable events, such as capital gains taxes if assets are sold at a profit.

For example, if an advisor sells an investment you’ve held for less than a year, you could owe higher short-term capital gains taxes. A well-planned approach considers tax-efficient strategies like holding certain investments longer to reduce tax impact.

A good financial advisor doesn’t just focus on returns. They also consider how taxes affect your overall wealth and look for ways to reduce unnecessary tax costs.

Final Thoughts: Asking the Right Questions Before You Commit

The right questions can help you avoid costly mistakes and find a financial advisor who truly puts your best interest first. By understanding how they operate, how they’re compensated, and how they’ll manage your investments, you can make a confident decision about who to trust with your financial needs.

A great advisor provides more than just investment management. They offer clarity, guidance, and long-term support, helping you make informed decisions at every stage of life.At Investment Insight Wealth Management, we believe in honest conversations and straightforward advice. If you’re looking for an advisor who listens, understands your goals, and helps you make smart financial decisions, let’s talk and start the conversation about your future today.