Invest Wisely

Questions You Should Ask When Interviewing Financial Advisors

by Ryan Kinnar5 min read
interviewing financial advisors

A financial advisor or planner manages your finances. You should take time to select the right person for this position. In fact, you should treat it like a job interview and get to know the potential candidates. When interviewing financial advisors and asking the right questions, you’ll get enough information to help you make the best decision.


How long have you been an advisor?

You want to know the person you’re entrusting your finances to has the experience for the job. While you may find someone with experience in accounting or banking, it doesn’t mean they are skilled in financial planning.


What subjects are you most interested in?

The answer to this question should align with your goals. If you are focusing on retirement and the advisor says they like to work with day trading or currencies, they are not the advisor for you. While advisors may be experienced and knowledgeable in various areas, there are certain subjects that hold greater appeal to them. You want someone who is interested in what matters most to you.


Who is your ideal client?

This is a continuation of the previous question. The advisor should be able to describe the client they would most enjoy working with. Perhaps this person enjoys working with serious investors who are willing to take big risks. If you have a young family and you want to plan for college and a mortgage, the advisor may not be right for you.


How do you figure retirement planning?

You want to know you will have enough money to get you through the end of life. Your advisor should have a conservative method of estimating how much you will need to live comfortably. This projection should include inflation, the expected rate of return and your planned spending habits.


What are your fees?

This question gives you an idea of how much the advisor will charge based on how they calculate their fees. It also tells you who will have their loyalty. A fee-based advisor will be paid by you, and they will work for you. However, one who receives their fee from a broker-dealer will have a tendency to focus on products offered by that firm.


How can you explain this?

Ask a question about some financial topic of which you have limited knowledge. A good financial advisor will be able to explain it in terms you can understand. While they are the experts for a reason and you shouldn’t expect to be as educated in financial matters as they are, they should be able to speak your language. If you want to know the difference between a traditional IRA and Roth IRA, their explanation should leave you feeling like you know more than before you asked the question. If they talk over your head in terms you don’t understand, they are not the financial advisor for you.


Interviewing Financial Advisors

Choosing a financial advisor is a big decision. Interviewing financial advisors is an important task and shouldn’t be made lightly, but only decided upon after lengthy research and asking the right questions.