Questions to Ask a Financial Advisor at Your First Meeting

When it comes to building wealth, you can’t overestimate the importance of having a great financial advisor. More than half of investors (55%, to be exact) who work with a financial advisor said they saved more for retirement than they would have on their own.¹

The National Study of Millionaires also found that almost 7 out of 10 millionaires (68%) worked with an investment professional or financial advisor as they built their net worth. They didn’t try to do it by themselves. Instead, they sought out the advice and services of someone with more knowledge and experience in building wealth. Smart move!

So, clearly, working with a financial advisor is worth it. But you shouldn’t pick just anyone. You want to be confident you’re working with a pro who knows your goals and can help you achieve them.

The best way to choose an advisor you can trust is by getting to know them. This guide will walk you through some questions to ask potential advisors so you know what to look for and how to choose a quality financial advisor.

Questions to Ask a Financial Advisor

Even if you’re just starting to invest, you’re the best judge of the type of person you want to work with to reach your wealth-building goals. Use the questions below as a conversation guide with potential advisors, and really listen to their answers. Sometimes, it’s not what someone says, it’s how they say it that’ll clue you in to whether or not you want to team up with them for the long haul.   

What do you love about your job?

Do you want to work with someone who dreads going to work every day? Of course not! You want a financial advisor who loves what they do, someone with a sincere desire to help people.

Not only will this question help you get to know an investing pro, but it should also clearly reveal their why—as in why they do this for a living. Do they care about their clients’ full financial picture, like whether they’re debt-free and have emergency savings? Or are they solely focused on their clients’ investment portfolios? What’s their story of how they got into the business? Do they have any stories that show how they’re fulfilled by their role? Someone who loves their work will be more than happy to share their why with you!

You’ll see what a financial advisor is all about by their responses to these questions. You’ll also know pretty quickly whether they’re just punching a clock or if they genuinely care about their clients’ financial well-being.

What services do you provide clients?

Most people know a financial advisor can help when it comes to:

• Creating a long-term investing strategy
• Weighing the pros and cons of different account types
• Picking mutual funds
• Rebalancing your investing portfolio
• Setting savings benchmarks to keep you on track with your long-term goals
• Answering tough questions about investing

But remember, your advisor should look at your whole financial picture. Find someone who not only understands your investing goals, but also your tax situation, your insurance coverage needs, and your real estate plans. If they provide estate-planning services as well—even better.

Financial advisors also have access to great online resources that keep you plugged in to your investments anytime by helping you track your investment account performance, visualize savings milestones, or estimate the nest egg you need for retirement.

When you meet with a pro for the first time, make sure you find out exactly what services and resources they offer to help you learn about all your options and reach your financial goals. Take advantage of all the resources they offer!   

What is your investment philosophy?

When you’re looking for an investing pro, what qualifications matter the most? Obviously you want someone who has expert-level head knowledge of all your investing options. But it’s also important for you to be on the same page about your investment philosophy.

Market chaos, inflation, your future—work with a pro to navigate this stuff.

What do we mean by investment philosophy? Well, it means they should have a long-term investing strategy. Steer clear of a financial advisor who wants you to risk your nest egg in single stocks, cryptocurrency or some other unproven “investment opportunity.” There’s no such thing as get rich quick. Slow and steady wins the race.

How will we communicate about my investments?

You don’t want to work with a financial advisor who only talks with you when you reach out. Look for someone who takes the initiative to communicate with you—keeping you updated on how your investments are performing and when it’s time to update your portfolio.

How much should you communicate with your financial advisor? That depends on you, so strike a balance that feels comfortable to you. For most people, that means connecting with their advisor once a quarter to get an update on how their investments are performing with a more formal check-in at least once a year.

This is the time to speak up about how often you want to touch base and set clear expectations from the start. You and your advisor will appreciate getting the details ironed out before one or both of you ends up frustrated.

How do you get paid?

When you meet with a pro for the first time, this may be one of your top questions. Paying an advisor for their services affects your bottom line, so you need to understand exactly how your advisor gets paid. Some pros offer a free initial consultation, but it’s only fair to pay them for their services after that. Here’s some of the payment methods your advisor may use:

• Assets under management (AUM) fee: This is probably the most common payment method. Your advisor is paid an annual fee, usually 1% of the total market value of the investments they’re managing.

• Hourly fee: Your advisor may be paid at an hourly rate (anywhere from $250–500 per hour) for the services you agree on at your initial meeting.

• Flat fee or fixed fee: This kind of fee is a prearranged total price for the services your advisor provides. It can include anything from helping with a simple 401(k) rollover to creating a long-term, comprehensive financial plan.

• Commissions: Your advisor might receive commissions on financial products (like annuities, insurance or mutual funds) you invest in through them. If they’re paid on commission, they usually don’t get any of the fees we’ve mentioned above. You’re paying them for their advice as well as their service to set up and monitor accounts for you.

A great financial advisor can clearly tell you not only how they’re paid, but also why their time, advice and services are worth it. That’s what you’re looking for. If an advisor dodges a question about fees, take it as a sign to go elsewhere. Don’t work with someone who won’t be up front with you about how they’re paid.

How will you measure and evaluate my investment performance?

You want a pro who sees the big picture, not just how each of your funds are performing. A great financial advisor will look at your mutual fund performance as a whole to make sure it stays on track with your long-term goals. They’ll also keep up with current trends in the stock market.

Also make sure the investing professional you choose understands how to manage risk by diversifying your investments (aka spreading your investments across several mutual fund types) and updating your investments to keep a balanced portfolio that grows steadily over time.

If any advisor wants to put all of your eggs in one basket by investing heavily in individual stocks or other risky market ventures, that’s a warning signal that they’re not the right pro for you. Run!

Can you tell me why the last two clients you lost stopped working with you?

Things don’t always work out, and it’s not necessarily a red flag if an advisor you’re considering has lost a couple clients recently. Notice how an advisor answers this question and whether there seems to be a pattern. If a pro lost two clients in the past month because they were frustrated by a lack of communication, that’s probably a sign to look elsewhere for an investing expert to work with!

Find a Financial Advisor Today

Retirement investing is a marathon—not a sprint. That’s why it’s important to work with a financial advisor who’ll stick with you all the way, plus have the knowledge and experience to guide you through the rocky parts of investing.

The questions and answers we walked through above can help you choose an advisor who’s on the same page about your investing philosophy and expectations.

If you’re ready to find an expert like that, reach out to one of our SmartVestor Pros. They’ll walk you through all the options and make sure you understand what you’re investing in—not just manage your investments.