Choosing a Financial Advisor

1. Ask for references

The best way to search for candidates is to request references from people you know and whose needs are similar to yours.

2. Ask plenty of questions

An adviser who wants to work with you should answer every question you have, and in advance.  Don’t be afraid to ask anything that comes to mind.  

3. Do a background check

Almost every fraud you hear about involving a financial adviser could have been avoided simply by contacting federal or state securities regulators to see if there were past problems.  You can get contact information from the North American Securities Administrators Association at

If you are dealing with a stockbroker, use the free FINRA BrokerCheck service at (go to “industry professionals” then “broker check”).  The toll free number is 800-289-9999.

If your advisor sells both securities and insurance, find out if he has had any complaints filed against him with your state’s insurance commissioner (

4. Stay in control

Be clear to candidates that you are not going to surrender control of the relationship.  Never hesitate to let a planner go if the relationship turns out to be less satisfactory than you expected.  At the same time, you have to give an advisor leeway to do his job – otherwise why hire an investment adviser in the first place?

sample questions to ask

  • Are you a fiduciary? (Fiduciary duties require stock and insurance brokers to put their clients’ interests ahead of their own.)
  • If your advisor is not a fiduciary you should ask: “Do you or your firm earn more money for recommending this investment? Can you suggest a simpler, cheaper way of accomplishing the same goal?"

  • What is your education and experience?
  • What are your investment beliefs?
  • What is your financial planning process?
  • How will you measure my performance?
  • How do you stay on top of things in the financial markets?
  • What services do you provide?
  • How much would I be paying for the investments/your services, all in? (See Thoughts on Fees link)
  • How often should I expect to hear from you on how my investments are doing?
  • Are there financial or other incentives for you to recommend certain investment products or are my choices limited to your company’s products?
  • How do you invest your own money?
  • Do you use any “risk management” strategies to prevent me from losing money?
  • Do you concern yourself with investment tax issues?
  • Do you provide a comprehensive written analysis of my situation along with your recommendations?

Likewise, there are the “right” questions to ask for an investments review. 
We believe that those include:

1. How much am I making?

2. How have I done in comparison with a benchmark?

3. How much risk am I taking?

4. How much am I paying?

5.  Are there any adjustments I should make?