7 Questions to Ask Your Financial Advisor

By Rhonda Campbell

A good financial advisor (FA) or financial consultant (FC) can help you make the right decisions to grow your wealth. Your FA might work primarily to find, purchase and sell funds to strengthen your retirement accounts. Furthermore, your FA might focus on managing your investments to grow your company’s bottom line or to keep your estate portfolio healthy.

Make Sure You Ask Your Financial Advisor the Following Questions

Unless you’re rolling an employee retirement account (i.e. 401K) over into an IRA, you’ll likely have to pay transaction fees when you open investment accounts. If you’re working with a financial advisor to make solid real estate and other business investments, you’re definitely going to pay fees or commissions. Depending on the fee structure set by the firm or individual financial advisor you work with, these fees and commissions could get pricey. It’s a reason asking financial advisors about payments is on our list. Other important questions to ask your financial advisor include:

  • Honesty – Perhaps the 2007 recession proved the importance of FA honesty more than any single event that’s happened over the last several years. You can measure a FA’s honesty levels by asking him how he would deal with “gray” situations. Also, conduct your due diligence and find out if a FA has ever been convicted of an offense involving investments (e.g. hedge funds, real estate sales).
  • Communication – Ask a FA how often she will follow-up with you, keeping you apprised of new investment opportunities, market changes, etc. Frequent and clear communication is a necessity when dealing with a FA. You need to make sure your FA communicates with you in a way that’s easy for you to understand. After all, financial jargon and language can seem complicated if you haven’t spent several years working in the industry.
  • Portfolio management experience – Find out what types of investments (e.g. commodities, stocks, mutual funds) a FA has experience working with. Also find out if a FA has worked with a major financial services firm as many of these companies offer robust training programs for newly hired FAs.
  • Licensing – Make sure a FA has required licenses. For example, FA’s can have a Series 3, Series 7 (a commonly held license), Series 65, etc. license. Regulations for FA licenses are administered by organizations like the Securities Exchange Commission (SEC) and the National Association of Securities Dealers (NASD).
  • Availability – Find out if you will have access to a team of FAs or just the one FA you’re interviewing. Also make sure you ask how the FA can be reached, especially during off hours (e.g. email, telephone, Skype)
  • Fees – Ask the FA about any and all fees associated with your accounts and transactions. Also find out about penalties, including early withdrawal tax penalties, and commissions you may have to pay.
  • Connections – Take the time to find out if the FA has connections to major financial institutions. Some of the top investment plans are managed by Fortune 100 financial investment firms. Find out if the FA has first-person relationships with leaders at these organizations. Take this and other steps before you hire a FA.


The reasons you can hire and benefit from working with a financial advisor or financial consultant vary. Depending on the reasons you hire a financial advisor, you may need to look for different qualities and experience in financial advisors. That said, qualities in financial advisors you should always look for include reliability, accountability and ethical muscle. After all, your financial advisor is your right hand when it comes to reviewing, understanding, consulting and choosing financial plans, investment, real estate and retirement options. Choose the right financial advisor and you can grow your income several thousand or more dollars a quarter. Choose the wrong financial advisor and . . . well, you don’t want to do that.

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