Evaluating Financial Advisors
Questions To Ask Financial Advisors
Advocate for Your Best Outcomes
Most people trust their advisor. Few ever question the system behind them.
Every investor wants to work with someone they like, trust, and respect. And often, they do. But assessing the quality of financial advice—and whether it’s aligned with your best interest—isn’t always straightforward.
The challenge? There’s a structural gap in the industry. Many well-intentioned advisors operate within a system that quietly prioritizes firm revenue over client outcomes.
Their intentions are good. But the system’s incentives are misaligned. As a result, most investors never receive full transparency—on fees, services, or how recommendations are actually made.
To make matters harder, financial decisions are often driven by rapport or referrals. The human side of trust matters—but it shouldn’t replace a clear-eyed look at how your advisor is compensated, how decisions are made, and what’s actually being delivered.
This guide is built to help you make a more informed decision—whether you’re evaluating your current relationship or interviewing someone new. These questions are designed to level the playing field, so you can choose with confidence.
THE QUESTIONS THAT NEED TO BE ASKED
Are They a Fiduciary?
Not all financial advisors are held to the same legal standard. A fiduciary is required to put your interests ahead of their own. That’s not just a marketing term—it’s a legal duty.
But many advisors are still allowed to operate under a “suitability” standard, which only requires that their recommendations be good enough—not necessarily the best for you. And most clients don’t know the difference.
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Fiduciary advisors typically hold a Series 65 or 66 license and are compensated for advice—not product sales.
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Broker-dealers often carry a Series 7 license, allowing them to sell investments for a commission.
You can verify any advisor’s background at FINRA Broker Check.
It’s not about titles—it’s about incentives. And the fiduciary standard is one of the clearest protections you have.
What is their scope of services?
A financial advisor should do more than manage your investments.
Comprehensive planning means looking at your entire financial picture—so your advice is coordinated, not siloed. But many firms offer “planning” in name only, with limited depth beyond asset allocation.
Look for advisors who address key areas such as:
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Estate Planning
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Tax Planning
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Cash Flow & Budgeting
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Risk Management & Insurance Planning
The CFP® designation is a good sign—they’re trained across all these areas and held to a fiduciary standard. But credentials are just the starting point. What matters is whether they actually deliver meaningful, proactive advice—or just say they do.
What is their investment philosophy?
How your advisor approaches investing says a lot about the value they actually provide.
Beware of advisors who promise to beat the market, handpick winners, or “navigate volatility” with proprietary strategies. Research consistently shows that most active managers underperform broad markets over time—and the cost of trying (in both fees and taxes) adds up fast.
A sound investment philosophy is built on:
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Broad diversification
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Low costs and tax efficiency
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Discipline and long-term focus
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Evidence—not opinions or forecasts
If an advisor claims they can outperform, ask to see the audited track record. And if they can’t—or won’t—ask why.
Good advice isn’t about guessing the future. It’s about preparing for it with a plan that works in the real world.
What is their fee structure?
Most investors don’t know what they’re really paying—because the industry rarely makes it clear.
Many advisors charge a percentage of your investments (often 1%), meaning your fee increases as your portfolio grows—even if the service doesn’t. That model isn’t always wrong. But it’s rarely explained in dollar terms, and it’s almost never questioned.
Some advisors call themselves “fee-based,” which often means they earn both fees and commissions. That structure can blur the line between advice and sales.
What matters isn’t just how much you’re paying—it’s whether the cost aligns with the value you’re receiving.
Flat-fee models bring transparency. You know exactly what you’re paying, and what you’re paying for.
Ask yourself: Can they clearly explain, in dollars, what I’ll pay each year—and how that could change?
How Do They Make You Feel—After Everything Else Checks Out?
Trust matters. Rapport matters. You should absolutely feel comfortable with your advisor.
But it’s important to build that emotional connection after the hard questions have been answered—not before.
Too often, investors choose an advisor based on personality or referrals without ever examining how they’re compensated, what they actually do, or whether their advice is rooted in anything beyond confidence.
Once you’ve asked the questions above, it’s time to ask yourself:
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Do you feel genuinely heard—and that they understand what truly matters to you?
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Do they explain complex topics in a way that makes you feel confident and included, not lost or dependent?
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Do you simply like them—and feel your values are aligned?
It’s okay to choose someone you like. Just make sure you also choose someone whose incentives, philosophy, and structure are aligned with your best interest.