Questions to Ask a Financial Adviser Before You Hire One

Short answer: The best questions to ask a financial adviser cover four things: their experience and record, how they and their firm get paid, their conflicts of interest, and what service you'll actually get. Regulators publish ready-made lists. The SEC's include "How do you get paid?" and "If I give you $10,000 to invest, how much will go to fees and costs, and how much will be invested for me?", and FINRA suggests comparing the answers with BrokerCheck. Confirm the adviser is registered on Investor.gov before you ask anything else.

What Should You Do Before the First Meeting?

Check that the person is registered. Investor.gov, the SEC's site for individual investors, says to confirm whether a financial professional is registered using its free search tool, and only then move on to questions about your own situation. Our step-by-step guide on how to check a financial adviser shows what to look for in the results.

It also helps to know what you want before you sit down. Washington State's Department of Financial Institutions suggests asking yourself:

1. Do you need help developing strategies to reach your financial goals, or do you just want suggestions on investment products?
2. Do you want help with a few targeted areas, or a comprehensive plan for your finances?
3. Do you already have investments you'd like help managing?
4. How involved do you want to be in decisions about your specific investments?
5. Would you rather pay through a fee, through commissions, as a percentage of the assets in your account, or a combination?
6. Do you prefer someone who is mainly a salesperson, an adviser, or a combination of the two?
7. How important is it that your provider has a legal obligation to act in your best interests and disclose potential conflicts of interest?

Your answers tell you which of the questions below matter most to you.

What Should You Ask About Experience and Background?

These come from the SEC's investor bulletin on hiring an investment professional and FINRA's guide to working with one:

• "What experience do you have, especially with people like me?" The SEC adds: what share of your time goes to people with situations and goals similar to mine?
• "What education have you had that relates to your work?"
• "What professional licenses do you hold?"
• "Are you registered with the SEC, a state securities regulator, or FINRA?"
• "How long have you done this type of work?"
• "Have you ever been disciplined by a regulator?" If yes, what was the problem and how was it resolved?
• "Have you had customer complaints?" If yes, how many, what were they about, and how were they resolved?
• "Do you or your firm have an overarching investment philosophy?" (FINRA)

If the adviser lists a designation such as CFP, our guide to what a certified financial planner is explains how to verify it.

What Should You Ask About Fees?

Every regulator list we reviewed asks about pay. FINRA suggests asking "How do you get paid?" and then pinning down the method: commissions on products you buy or sell, a percentage of the assets they manage, a flat or hourly fee, or something else. The SEC's lists go further:

Question	Source
"How does your firm get paid?"	SEC investor bulletin
"What are the fees that I will pay for products and services?"	SEC investor bulletin
"How and when will I see the fees I pay?"	SEC investor bulletin
Which fees will I pay directly (such as a commission on a stock trade), and which are taken from the products I own (such as some mutual fund expenses)?	SEC investor bulletin
"If I invested $1000 with you today, approximately how much would you get paid during the following year, based on my investment?"	SEC investor bulletin
"If I give you $10,000 to invest, how much will go to fees and costs, and how much will be invested for me?"	SEC conversation starters
"Do you or your firm impose any minimum account balances on customers?" If so, what happens if my portfolio falls below the minimum?	FINRA

Once you have a percentage or a dollar figure, run it through our adviser fee calculator to see what it could cost over time, and compare it with the ranges in our guide to how much a financial adviser costs.

What Should You Ask About Conflicts of Interest?

Ask directly:

• "How might your conflicts of interest affect me, and how will you address them?" (SEC conversation starters)
• "Does someone else (such as a fund company) pay you or your firm for offering or selling these products or services?" Do you get any other incentives for selling them? (SEC)
• "Do you offer 'house' products?" If so, what kinds, and do you get incentives for selling them or keeping them in my account? (SEC)
• "Are you required by law to always act in my best interests?" and "Will you put that commitment in writing?" (Washington DFI)
• "Would my account be an advisory account or a brokerage account?" (Washington DFI)

Our guide to fiduciary vs. non-fiduciary financial advisers explains how the standards for advisers and brokers differ.

What Should You Ask About Services and the Relationship?

These questions set expectations about how the relationship will work once you sign:

• "Given my financial situation, should I choose an investment advisory service? Should I choose a brokerage service? Should I choose both types of services? Why or why not?" (SEC conversation starters)
• "How will you choose investments to recommend to me?" (SEC conversation starters)
• "What type of investment products and services do you offer? Are there any products or services you don't offer? Why?" (FINRA)
• "How often should I expect to hear from you?" (SEC)
• "How often will you review or monitor my account?" Are there any limits to that service? (SEC)
• "If my investments are not doing well, will you call me and recommend something else?" (SEC)
• "If I invest with you, how can I keep track of how well my investments are doing?" (SEC)
• "Who is my primary contact person?" Is that person a representative of an investment adviser or a broker-dealer, and who can I talk to if I have concerns about how this person is treating me? (SEC conversation starters)

If you're meeting an adviser about retirement, these service questions are a good place to spend extra time, alongside the experience question about people in situations like yours.

What Should You Ask For in Writing?

Washington's regulator suggests three requests:

1. A written commitment that the provider will always act in your best interests, if they say they're required to.
2. A written record of any disciplinary history for the adviser and their firm.
3. The adviser's Form ADV (the registration form investment advisers must file) and/or Form U4 (the registration form for people who work with brokers).

The SEC says many of its conversation-starter questions may also appear in the firm's relationship summary, known as Form CRS. Ask for it before the meeting and bring it with you.

How Do You Check the Answers?

Don't rely on the conversation alone. FINRA recommends comparing what an adviser tells you about disciplinary actions, arbitration awards and customer complaints with BrokerCheck and other third-party sources.

The Bottom Line

You don't need to invent your own interview. The SEC, FINRA and state regulators have already written the questions: experience and record, how everyone gets paid, conflicts of interest, and the service you'll receive. Check registration first, bring the firm's Form CRS, ask for the important answers in writing, then compare what you hear with BrokerCheck. If you're still deciding whether you want a person at all, our robo-advisor vs. financial adviser guide compares the options.

Frequently asked questions

What should I ask a financial adviser at the first meeting?

Start with experience, registration, fees and conflicts. Regulators suggest questions such as "What experience do you have, especially with people like me?", "How do you get paid?", "How might your conflicts of interest affect me, and how will you address them?" and "Have you ever been disciplined by a regulator?"

What is the most important question to ask a financial adviser?

There isn't one official answer, but how the adviser is paid comes up on every regulator checklist we reviewed. The SEC suggests asking how much of $10,000 would go to fees and costs and how much would be invested for you.

How do I know if a financial adviser is telling the truth?

Check their answers against public records. FINRA suggests comparing what they tell you about disciplinary actions, arbitration awards and customer complaints with BrokerCheck and other third-party sources, and Investor.gov's free search shows whether they're registered.

What are conversation starters on Form CRS?

They're key questions about your own situation that the SEC suggests asking after you confirm a professional is registered, such as how they'll choose investments for you and who your main contact will be. They may be included in the firm's relationship summary, also called Form CRS.

Should I ask a financial adviser to put anything in writing?

Washington State's securities regulator suggests asking whether the provider is required by law to always act in your best interests and whether they'll put that commitment in writing. It also suggests asking for a written record of any disciplinary history and for the adviser's Form ADV.

Sources

1. Investor.gov (SEC): Investor Bulletin: Questions to Ask when Hiring an Investment Professional (2019)
2. Investor.gov (SEC): Conversation Starters
3. FINRA: Working With an Investment Professional
4. Washington State DFI: Questions to Ask Before Choosing an Investment Professional

This guide is general information, not personal advice. Your situation may differ, so consider talking with a qualified professional, such as a fiduciary financial adviser, CPA or licensed agent, before making a decision.