Questions to Ask When Hiring a Financial Advisor

Questions to Ask When Hiring a Financial Advisor
16 Dec 2016

The process after deciding to hire a financial advisor can be a daunting one.  You have already determined that you are lacking either time, knowledge, or desire to manage your investments.  The next step is interviewing potential advisors.  Here are 6 questions to get you started from someone on the other side of the table, along with questions to ask yourself to help evaluate their answers.  

#1.  What is your support structure?

This question is important because it gives insight into how the advisor runs their practice.  Are they a one man shop?  Do they work in a team with other advisors?  Do they have support staff in place to help if they are out of the office or on vacation?

#2.  What is your recommendation process?

This allows you to dig a little deeper into the advisor’s philosophy.  Do you want someone investing your money after filling out a 10 Question Multiple Choice Risk Tolerance Questionnaire?  Will they be making recommendations in the first meeting?  Do they have a process to determine the right investment mix for your circumstances or do they recommend the same products to everyone?  Do they regularly review the investments and what is the process for making a change?

#3.  How do you measure your performance?

Is the advisor trying to meet or beat the market index?  Are they basing their recommendation on a number that you want to make?  Or will they help you determine a return goal that is based on your personal need for the long term?

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#4. What is your regulatory history?

Anyone registered to sell securities can be looked at on BrokerCheck at  There is also a link to the SEC’s Investment Advisor Public Disclosure if they are an Investment Advisor Representative which can be found at  Think of this as a mini-background check.   I suggest looking for patterns of disclosure events.  Ask for an explanation if there is something in a pending status.  The advisor may not legally be able to give specific details surrounding a pending disclosure, but you should make sure you are comfortable before moving forward.

#5.  How are you compensated?

Will the advisor be charging a fee for their advice or will they be earning a commission on the products they sell?  Will they be charging a fee based on the level of assets they are helping you manage, or are they charging an hourly or other rate?  Is the fee tiered or is it a breakpoint?  Finding out what licenses they hold will also help you determine their compensation structure regardless of their title.

#6.  Who is your ideal client?

This will give you perspective into the type of people the potential advisor usually works with.  If you are nearing retirement from a job at a factory, and you are speaking with someone who specializes in helping small business owners transfer their business, it might not be the best fit.

Remember, a quality advisor should be interviewing you as much as you are interviewing them. They should be taking the time to understand more about you and your situation, and how they can best help you, even if that means that they refer you to someone else.  

Clearly, this is not a comprehensive list.  One other aspect I find incredibly important is whether or not you like the potential advisor.  This should be an interview for someone to help you through some potentially challenging times.  It is important to enjoy the process as much as the end result.  


Casey Mushrush

Have a question or want to see a post written about a specific subject? Send me an e-mail at I am involved in many of the educational elements of Premier Investments of Iowa, including appearances on WMT Radio, WHO Radio, KXEL Radio, and KCRG Television. In addition, I am a frequent guest host of the Premier Pulse, a personal finance education video blog. I partner with my clients to develop a specific set of financial goals based on their personal situation. We analyze their state of affairs, map out a course of action, and implement a written financial plan based on their own circumstances. We design and implement a long term investment strategy guided by the principles of asset allocation and based on personal risk tolerance. I utilize behavior coaching to help clients deal with the emotional aspects of investing and stick to their long term plan. Additionally, I am responsible for the practice management of an Office of Supervisory Jurisdiction. I aid our advisors by ensuring they are running their businesses in a compliant manner, as well as providing direction and suggestions on process improvement and implementation.