14 Questions to Ask a Financial Advisor in Your First Meeting


Financial planners are aplenty in a world that’s increasingly becoming aware of the need for them. The main problem that the industry has is that there’s no set standard to differentiate between them. 

Even if there are certain requirements a person must complete to become a planner, they usually approach the job with different goals. 

As someone looking into services from a financial advisor, you need to ask the right questions to understand if the person is worth entrusting your money to.


Why Hire a Financial Advisor in the First Place?

Everyone can take control of their finances to some degree, but the effectiveness varies from person to person. Even if a person has the capability of fulfilling a certain financial goal, he/she may not know how to reach that goal. 

You could be planning for retirement or looking for investment opportunities, but you are not aware of your options.

An advisor can help create a plan for you to get from point A to point B.

The advantage that financial advisors have is their knowledge and experience. They are able to consider your needs, lifestyle, and goals into the equation. 

However, not all of them will be in it for your benefit. Without asking the right questions, you could end up losing money.

Here are the questions you should ask during the first meeting:


1. Are You a Fiduciary?

A fiduciary is someone legally obliged to put their clients first. Not only do they have to prioritize your benefit before themselves, but their job requires them to. Fiduciaries gain certification and accreditation to set them apart from other advisors.


It is important to know if your advisor is a fiduciary because it will affect how they approach your financial plan.


If the advisor is not fiduciary, they can recommend products that aren’t ideal. They could offer plans that get them more money first before putting any money in your pocket. 

You want to work with someone who understands, cares, and puts you first.


2. How Do You Make Money as a Financial Advisor?

Financial advisors can earn money in a multitude of ways. The way to differentiate them is their fee or payment structure. Here are the most common ones:

  • Flat fee: Advisor asks for a fixed amount for his/her services.
  • Hourly fee: The advisor will charge you depending on how much time they worked on your financial plan. They can also bill you for the consultation and any future meetings.
  • Percentage fee: These advisors charge little to nothing at the start of your partnership. Instead, they take a small percentage of any profits you gain with their help. This usually applies to some investment planners.

Many recommend going for advisors that charge a flat fee or regular fee. You know what to expect and what to pay them. 

The problem with percentage fee advisors is that they eat a chunk of your portfolio’s profits before anything gets to you. However, some argue that percentage fee advisors will work harder to ensure that you get a profit.

Even then, you could pay less or pay more depending on your portfolio’s performance. It’s all about what you are comfortable paying and if you agree to the advisor’s system.


3. What Are the Other Fees You Have?

After the fixed, hourly, or percentage rate the advisor discloses, he/she might still impose other payments.

For example, some can charge a 1% fee on your profits from any investment portfolio. 

This may seem small for now, but can cost you hundreds of thousands, especially for retirement funds and long-term investments. The advisor may be eating away at the potential money you gain without you knowing about it.


4. Do You Have Alternative Sources of Income?

Some advisors don’t tell you that the products they’re recommending come from a company that’s actually paying them to promote their products. They earn commissions for every customer they bring in and get percentage payouts. 

Whether it is real estate, mutual funds, or other investments, they may be getting commission. They could offer you a product that’s not in your best interest because they can earn more from it through a commission.

You want to ask this because you want to find out if the advisor is not being influenced by outside factors. It can create a conflict of interest where you are no longer getting the benefits you’re supposed to. 

Another way to approach this is to ask if the advisor has tried or owns the products they are recommending. It gives you a better grasp on who they are, and you can make a judgment from there.


5. How Long Have You Been Working as a Financial Advisor?

Experience is vital in the financial field, and those who’ve successfully navigated through the years have a lower chance of making mistakes. You can compare a new advisor to a new surgeon, where a patient’s confidence may not be as high compared to trusting a seasoned one. 

Experience offers you stability, and confidence.

Of course, there is also a benefit to hiring newer advisors compared to seasoned ones. While newer ones have more risk associated with them, they are more open to newer products and technology. 

They are also eager to build their portfolio, meaning that they’ll work harder to ensure that you get the services requested of them. Others can even offer significantly lower fees and charges so that you get their services.


6. Will There Be Other Advisors Who Can Back Up Your Services?

A worst-case scenario that can happen if you’re unprepared is that you could lose all access to your hard-earned money. The advisor may encounter a sudden hospitalization or death. 

In lighter scenarios, they could be out of the country or unavailable when you need them the most. It’s important to have a backup, and that back-up should be a qualified person that can take over your advisor’s services if it becomes necessary.


You don’t want a vague answer here. You must have details of another person in that advisor’s firm who can understand your strategy and can make recommendations that the advisor can trust. 


Even if they may not disclose all information about your plan, it can at least be someone who knows how to move forward.

If the advisor is working solo, then you should ask the question anyway. You have to know if you can acquire control or continue the plan in case something happens to him/her.


7. Are You a Financial Planner, an Investment Advisor, or Both?

Depending on your needs, you can either hire a financial planner or an investment advisor. 

  • Financial Planner - A financial planner usually has expertise, like planning for business finances, or working towards retirement. They can usually work better on certain demographics and situations. They may know a bit about investments, but they’re versed more on the planning side.
  • Investment Advisor - An investment advisor is all about creating and improving an investment strategy. They will help you create a portfolio that matches your risk profile. Are you more of the safe type of investor with mutual funds, or do you like the volatility of futures and cryptocurrency? A good investment advisor will be able to explain to you the details in a simple manner.

Some financial advisors know how to do both, though if you only need to focus on one aspect, it’s better to hire a specialist. Always exercise caution, as past performance doesn’t always translate to similar future results.


8. How Will Our Relationship Work?

You need to know the availability of your advisor and how often you need to meet each other. 

  • Can you always contact him/her when you need it?
  • Are they accessible through a phone call or an email? 

They might be too busy with other things that they’ll disappear with you in crucial moments.

You want to get a feel for how open and collaborative an advisor is. It also depends on the plan you have set up. 

For example, some investment plans take around a year before you make any significant adjustments. Other plans require more frequent meetings.


9. What Designations Do You Have?

Designations are often very important in the financial world. To attain a designation, one has to study and complete requirements. 

They are not easy to get or maintain. 

Oftentimes, these designations require always being updated and consistent with newer practices of their specialization. Here are some designations you may be interested in:

  • Chartered Financial Consultant (ChFC): These advisors underwent studies and exams while also displaying prowess through work experience. It encompasses a broad understanding of the financial world, making them versed in many topics.
  • Chartered Financial Analyst (CFA): An advisor with a CFA designation is considered a financial expert. It means they have proven their ability to create sound investment decisions. They strictly follow a code of ethics and are some of the best people you can find for investments.
  • Certified Financial Planner (CFP): To get this designation, an advisor must pass an exam, undergo a program, and log in experience. As a CFP, they are accredited financial planning experts. They must also continue to undergo studies to maintain the designation.


10. Why Did You Choose This Career?

Financial advisors come from all sorts of backgrounds and aspirations. Some of them have a genuine desire to help people and see them succeed. 

You want to work with a person who really wants to understand and help you. You can get a feel for what they’re like as they converse.

Others are just in it for the money and the profit. While yes, it can be a lucrative career, advisors will gain wealth as long as they keep working. 

Their expertise also means that they have an advantage in planning their finances. However, if you find that they’re too focused on how much money you get, then they’re working for your money rather than for you.


11. What’s Your Investment Philosophy?

Investment strategies and beliefs also differ from person to person. You want to ask this question to understand how they’ll approach your plan and if they match with what you are looking for.

You want someone who truly understands what he/she is doing and is capable of sticking with the plan to the end. 

Experienced advisors know to stick to the plan, no matter the market conditions.

If your investment styles do not match, then you can get into conflict later on. Make sure the advisor aligns with your values.


12. Who Are Your Usual Clients?

You can get an idea of the type of people they work with this question. You’ll see if their ideal client is one that matches you and your goals.

It is another question to see if you fit. Some advisors do well with those nearing retirement, while others do well with blue collar workers, etc.


13. What Assets Do You Target When Investing?

When it comes to investments, you want diversified assets. Investing in two different stocks in the same market is not diversification.


They must also be aware of which markets are correlated with one another. One good way to diversify is to choose stocks from the US, and international ones as well.


By investing in different regions, you have a better chance of hitting your goals, even if one asset class fails. Another way to diversify is to look at different markets, from stocks to real estate and even crypto.


14. How Did You Adjust Your Plans During the Pandemic?

This question would be the true test of their ability to adjust during unexpected times. You’ll know if they keep level-headed and what kind of moves they make to adjust their strategies to fit unusual times.

It pays to know if the advisor understands these situations and knows how to change it up if needed. You can even take it a step further and ask them about the 2008 crash if they were already working at that time.


Don’t Be Afraid to Ask Questions

Financial advisors know that any potential clients will ask them hard-hitting questions. There are a lot of financial advisors out there who have the wrong focus or little experience to help you.

When you ask the right questions, you know what to expect and how to understand the person you’re dealing with. The more you understand them, the easier it will be to trust them with your financial plans.

121 FCU is always open to meeting anyone who needs financial planning or investment services. 

You can find someone to trust, and our team prioritizes the benefit of our clients. Contact us today to learn more about our services.

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