Interviewing a financial advisor is crucial to understanding how they can meet your financial needs and what level of service you can expect. You should should only make a decision after you have taken the time to compare several professionals, learn about your personal needs, and develop an idea of what type of personalized financial advice you need.
To ensure you make the right choice, it’s important to ask insightful financial advisor interview questions that go beyond what’s available on their website. Instead, look at deep information about their abilities, beliefs, and strategies so that you choose a financial professional who is truly committed to the best possible outcome in your situation.
Essential Steps Before Interviewing Financial Advisors
Before you set up an interview with anyone, it helps to have some good ideas about what you need and want in this person. They will play an important role in your long-term financial well-being, and that means you really want to make this initial interview (and the actual hiring decision) with careful attention and insight. Here are several things to do before you set up that interview.
Identify Your Financial Needs
While you do not need to have an actual plan in mind just yet, you should have some idea of where your financial health stands right now. Identify your needs and goals:
- Retirement planning
- Getting out of debt
- Building wealth
- Reducing taxes
Your objective is to ensure that you are hiring a financial advisor with the skill and knowledge to guide you through these decisions. If you do not know what you want to achieve, it will be much harder to choose a professional. Many advisors will ask you what your goals and objectives are. Some may ask about your obstacles. Be ready for these questions.
Researching Potential Advisors
Next, take some time to consider a few different professionals. Do some academic research here – look at who they are, what they know, and what services they provide. You also want to read up on their education, licensing, and certifications. The more information you have in these areas, the better. Once you make a list of a few advisors to speak to, then it is time to gather the important questions you’ll want to ask.
Invested Better is the ideal place to get a start on that list of financial advisors. We can help you find the company or investment advisor that is right for you based on all of the information you provide. You can get matched with a financial advisor with us now.
Key Questions to Ask Potential Financial Advisors
Use the following questions as an example. Make sure you consider various questions that are specifically important to you on your quest for hiring the best financial advisor for your needs.
What is the Advisor’s Credentials and Experience?
Start here with some questions about their credentials.
- What relevant licenses and certifications do you hold?
- Are you a fiduciary?
- What level of education did you receive in financial planning or investment decisions?
- Do you stay current on your education or work to improve your knowledge of specific investments over time (a great question for advisors who offer modern investing methods, such as cryptocurrency)?
- Are you a Chartered Financial Analyst, Certified Financial Planner, or Personal Financial Specialist?
Not all financial advisors are, in fact, licensed or certified. It helps you learn what types of services they offer, and then, based on a bit of research, you can verify that they have the necessary credentials to provide those specific investments. Keep in mind that fiduciary duty does not mean any specific licensing, but it may indicate that they follow key regulations to make decisions based on what is best in your situation.
What is the Advisor’s Investment Philosophy?
You certainly want to have a meaningful relationship with your financial advisors. To do that, you need to choose an advisor who really has your best interests in mind but who is also clear on their investment goals and methods. You want to be sure you are on the same page with them. If you do not know what your financial goals are, you have to trust your financial advisors to make wise decisions for you. Choose a professional who supports their clients and is clear about how they make investment or other financial decisions.
- What is your investment philosophy?
- What types of individual stocks and mutual funds do you often recommend?
- How often do you rebalance or change accounts to improve investment outcomes?
- What factors lead you to make those changes?
- Will I get to make decisions about my assets, or will you do it for me?
- Considering your fiduciary duty, how do you make decisions about which assets, investments, and services I need and would benefit me?
- Are there any conflicts of interest that I should know about before I work with you?
- Will you work with my tax planning team or accountant during tax time?
- How do you measure your personal success? Is it based on achieving your client’s goals? Do you feel it is by increasing their net worth?
- How much money have your clients made over the last year?
- How much money have your clients lost over the last year?
- How much money has your investment portfolio made over the last decade?
- Where do you see future investment opportunities?
What is the Advisor’s Fee Structure?
It is critical that you know what the financial planning or investment management services provided by this client will cost you. Financial advisors should have no problem talking to you about their fee schedule. Ask these questions:
- How do you charge fees, and what services are included?
- Do you charge a flat fee for your services?
- Are there any instances in which you charge a fee-only schedule?
- How do I pay you? How often do I pay you?
- Do you charge an hourly rate for any of the services you offer?
- How do you manage retirement accounts and advice in terms of cost?
- How do you get paid if you are selling a financial product to me? Do you get paid a commission?
What is the Advisor’s Communication Style?
Another important question to have with the financial advisor is a bit more specific to your needs. Learn which ways advisors communicate with their clients. Whether they are selling products or providing advice, you want to know how they will talk to you, including answering questions such as:
- How often do you typically communicate with your clients?
- How frequently will I have a financial planning session or meeting to update me?
- Will you provide routine support for business financial decision-making as I grow my company?
- How are your fees structured when I reach out with questions or concerns? Flat fee only or hourly fee?
- How often do you provide updates on wealth management changes?
- What do you do to measure success and communicate with me the necessary changes I need to make?
- If you provide tax planning help, do you schedule a specific time for this, and if so, when?
Post-Interview Evaluation
With all of this information available to you, it becomes possible to start making some decisions about which person may be a good fit for you. As you work to build your financial life, though, you need to take into consideration more than just services. You need to choose the financial advisors who have your best interest at heart. Consider answering these questions yourself after each of the interviews you conduct.
- Do you like them from a personal perspective?
- Do you feel as though they are trustworthy?
- Are they educational and willing to teach you or just direct you?
- Do they provide clients with hands-on support and connectivity?
- Do you think you can build a relationship with this person?
- Do they listen to you or just tell you what you need to do?
- Do they give you options?
Asking the right questions plays a big role in how you will then answer these questions. In order to really get a good idea of what a person can and will provide to you, then evaluate each person from an objective standpoint. Then, go back and compare them.
Look for Red Flags
As you compare options, consider these common red flags:
- The advisor is not a fiduciary.
- You do not like the way they speak to you.
- It takes forever for the advisor to set up a consultation.
- Reviews online of the advisor discuss poor performance or difficulty in communicating.
- The advisor fails to provide you with clarity on their education and experience.
Comparing Different Advisors
How do you know which advisor is the right one for you? Financial advisors have to show you, in that interview and onward, that they care about you. That means they make time for the client, answer the client’s questions, provide clarity when needed, and are willing to offer custom solutions. As you compare each one of the options available to you, consider a few more questions to ask.
- Which advisor’s financial planning or recommendations seem to be most in line with your goals?
- Is the financial advisor willing and able to explore new strategies with you? Do they only give you one option, or do they work with you as a team to create a strategy that fits you better?
- Which of these professionals makes paying them easy and clear?
- Which makes it harder to determine how much it will cost you?
- Which are fiduciary financial advisors, and which may have some conflicts of interest with some of the investment options they offer you?
With all of this information available to you, the next step is really to learn as much as you can about the provider. Research them online, explore their history, ask them to speak to one of their clients, and always discuss your expectations with them.
Be clear about what you want to achieve in this relationship.
- Do you want to build a retirement account to allow you to retire early?
- Are you looking for a way to manage your finances and get out of debt?
- Do you really just want someone to handle your net worth for you and help you leave behind a legacy?
Remember that this is just an example to help you get started. Assess all of the information about any person you are considering working with to get a better understanding of how well you believe they will help you. If they are the type of personality that you want as a client, start investing. If you are worried about the security, the risk in the way they want you to invest, or your savings objectives being too tough, let them know. Find out how they can make adjustments or if they are not willing to do so.
Final Thoughts On Interviewing a Financial Advisor
A financial advisor is a person that you absolutely need to have confidence in. Asking these interview questions can help you gauge their experience, communication, and skills. Ask questions about what they believe they can do for you. Then, evaluate several advisors to determine who is the best fit for your needs.
Invested Better can help you. By using our tools and resources, you can find a financial advisor that works to fit your needs and goals. Put your trust in someone with a proven level of success. Use our free advisor match tool to get the process started. There is no cost to you, but you will get clarity on the types of professionals available to help you.
