skip to Main Content

Questions to Ask Before Working with a Financial Advisor

Hiring a financial advisor is one of the most important relationships you establish in your adult life and it is important to know how to find the best one for you. Virtually anyone can call themselves a financial advisor these days unfortunately. Below we list some distinguishing characteristics and a question guide to help you find the right fit for you.

One of the highest distinctions in asset management is a Chartered Financial Analyst (CFA®) designation. This credential shows a completion of developing a foundation in advanced investment analysis and portfolio management skills. But don’t just look for investment performance.

Your financial success includes the big picture which is the foundation for financial planning. The highest certification standard for financial planning is the CERTIFIED FINANCIAL PLANNER™ designation. CFP®s are committed to professional standards and held to a code of ethics. If you want to do a background check on your advisor you can also look them up on www.brokercheck.finra.org for their license and background details. You can also check www.CFPboard.net to confirm or search for a designated CFP®. 

Additionally, an advisor holding a CFP® can still operate as a broker and collect commissions for selling various products to their clients. Typically these advisors hold a Broker license and/or insurance licenses as well. If you are not comfortable with this arrangement, you may want to look for a Fee-Only advisor. Fee-only advisors are the exception because they do not sell products for additional fees or commissions. They can unequivocally state they are a fiduciary and are not affiliated with a bank, brokerage firm or insurance company. These individuals can be found on www.feeonlynetwork.com and/or www.napfa.org where there are additional resources for how to find an advisor.

Check to make sure the financial advisor has the experience and expertise necessary to provide advice on your particular situation. Ensure the financial advisor has the qualifications and resources needed to provide objective, functional guidance.

Finally, make sure the financial advisor is an effective communicator who can explain any and all financial topics in an easy-to-understand manner. Advisors should be asking a lot of questions and letting you talk 80% of the time. If it feels like you are being delivered a sales pitch, you may need to question their intent. Ideally, This should be a long term relationship and it will be important to stay connected regularly with the advisor.

What to Ask a Financial Advisor

Here are a list of questions you can take to interview a new advisor or check in with your existing advisor:

  • How are you compensated?
  • If you accept commissions, will you itemize the amount of compensation you earn from products that you recommend to me?
  • Do you accept referral fees?
  • Are you held to a fiduciary standard at all times?
  • Would you sign a fiduciary oath committing to putting my financial interests first?
  • Have you ever been disciplined by the SEC or FINRA?
  • Do you provide comprehensive financial planning or just investment management?
  • Do you have many clients like me?
  • How will you help me reach my financial goals?
  • What happens to my relationship with the firm if something happens to you?

If you have more questions about looking for an advisor or want to discuss these ideas further, contact us! We’d be happy to help.

M & A Consulting Group, LLC, doing business as CAM Investor Solutions is an SEC registered investment adviser. As a fee-only firm, we do not receive commissions nor sell any insurance products. We provide financial planning and investment information that we believe to be useful and accurate. However, there cannot be any guarantees. 

This blog has been provided solely for informational purposes and does not represent investment advice or provide an opinion regarding fairness of any transaction. It does not constitute an offer, solicitation or a recommendation to buy or sell any particular security or instrument or to adopt any investment strategy. Past performance is not a guarantee of future results. Diversification does not eliminate the risk of market loss. Tax planning and investment illustrations are provided for educational purposes and should not be considered tax advice or recommendations. Investors should seek additional advice from their financial advisor or tax professional.

As a Wealth Advisor and Investment Advisor Representative at CAM Investor Solutions, Sarah Contino, CFP®, specializes in assisting women, especially but not limited to those going through a life transition such as job change, marriage, loss of spouse, and retirement. She also has years of experience helping executives and academics with retirement planning.