Questions to Ask a Financial Advisor

If you are considering seeking professional financial and investment advice, you need to know what your questions for a financial advisor should be.

When selecting a financial advisor, you must select the financial advisor that best suits your investment needs and particular financial situation. This means that you need to know what to have as questions for a financial advisor. When you have specific questions for a financial advisor, their answers will help you determine if they are the right fit for you.

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STRATEGIES FOR FAMILIES WORTH $5 MILLION TO $500 MILLION

7 Secrets To High Net Worth Investment Management, Estate, Tax and Financial Planning

The insights you’ll discover from our published book will help you integrate a variety of wealth management tools with financial planning, providing guidance for your future security alongside complex financial strategies, so your human and financial capital will both flourish.

Clients frequently share with us how the knowledge gained from this book helped provide them tremendous clarity, shattering industry-pitched ideologies, while offering insight and direction in making such important financial decisions.

In this article, prepared by Pillar Wealth Management LLC, you will learn what your questions for a financial advisor should be in order to determine if they are the right fit for you. Pillar Wealth Management LLC is a wealth management firm that caters to high-net-worth and ultra-high-net-worth individuals who have between $5 million and $500 million in liquid assets. Suppose you would like more information on managing your considerable wealth and large investment portfolio. With your specific questions for a financial advisor in hand, you can schedule a free no-obligation consultation call with the co-founders of Pillar Wealth Management, Chris Snyder, and Hutch Ashoo. They can help you determine how best to manage your wealth.

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You should look for proper credentials (CPA, CFP, etc.). Through your conversations, you should determine what services the advisor provides and the fee structure they use.

There are many questions you can ask, but important ones include asking about their background and certifications, how they are paid, and how easily they can be reached.

A typical fee for an advisor is a percentage of the value of the assets they manage for the client, around 1%. They may also charge for a particular service, such as preparing a retirement plan.

You should ask about the advisor or planner’s approach to investment: active or passive. You should ask them about their investment and asset allocation strategies.

A financial advisor will work with the client to develop a financial plan based on the client’s financial situation and goals. They will recommend investments and retirement and estate plans.

Financial advisors are usually focused on making investment recommendations while wealth managers will look more holistically at the client’s financial situation to develop a long-term financial plan.

If you have wealth in excess of $100,000 to invest, but you are not particularly savvy about financial markets and investment vehicles, you will benefit from the services of an advisor.

A financial planner wants to know all about your financial goals and dreams, while an advisor will want to help you with making profitable investments. They may have different fee structures.

Make sure that the planner you are interested in has the appropriate credentials. Ask them about their investment philosophy and how they are compensated. They should be a fiduciary.

Talk to your colleagues, friends, and family to see if they can recommend a good retirement advisor. Do some research online and shortlist some advisors to talk to about your goals for retirement.

10 Questions to Ask Your Financial Advisor

important questions to ask financial advisor

  1. What is your minimum asset requirement?
  2. How long have you been a financial advisor?
  3. How long do your clients stay with you on average?
  4. Are you a fiduciary financial advisor?
  5. What is your philosophy about active management?
  6. What do you do to minimize my costs?
  7. How often do you update my financial plan?
  8. Do you believe you can outperform the market?
  9. When I call with a question, who will I be talking to?
  10. How can you help me feel secure that my money won’t run out?

1. What is your minimum asset requirement?

This is an important question for a financial advisor because it will be linked to your advisor’s fee structure. If you are a high net worth individual, the advisor will charge you a fee that is a percentage of the value of the assets that they will manage. In that case, the minimum asset requirement may be as much as $5 million.

Many advisors may require a minimum of $250,000 in investable assets. They may charge you a set fee for each of their services, such as a financial plan or a retirement plan.

2. How long have you been a financial advisor?

When your hire a financial advisor, it’s nice to know where they went to school and what their credentials are. You may be happy to hear that the advisor is a CPA, for example. However, what’s really important is their level of experience. You’d like them to have plenty of experience working with people like you.

You care about the advisor’s capacity to relate to your financial situation. If their clientele has many of the same goals and needs as you have, and the advisor has been successful in satisfying the needs of those clients, you’re on the right track!

And if the advisor has been in the field since at least the last major financial downturn, even better!

3. How long do your clients stay with you on average?

Working with a financial advisor or planner is a long-term project. You can expect an advisor to work with you for decades, from the time you start accumulating some wealth to the time you retire. And beyond — your advisor may help you plan the distribution of your assets when you are gone.

So, you want to build a long-term relationship with your advisor. Ask them about their long-term clients. If the advisor has 20 years of experience, you could expect them to be working with the same clients for 10 years at least. This reflects their ability to build a trusting and understanding relationship with a client.

Questions to ask a financial advisor

4. Are you a fiduciary financial advisor?

A fiduciary advisor is required to make your best interests a priority. A fiduciary will not put their interests first, nor the interests of the company they work for.

When making investment recommendations, a fiduciary will compare the fees and options to determine what’s best for your financial situation. You want an advisor who is paid a set fee and does not earn commissions on the products they sell.

A fiduciary will not hide the facts and will avoid any conflicts of interest. If there are conflicts, they will be fully disclosed.

5. What is your philosophy about active management?

The debate about which is better, active or passive management is ongoing. However, according to Warren Buffett, passive investing is the way to go.

An active financial advisor will try to outperform the market, using their experience and various analytic tools and forecasts. They are able to identify stocks that are undervalued.

In contrast, a passive advisor selects investments that track a particular index or indexes. The claim is that this avoids human biases and errors in judgment. Finally, some research has shown that passive management outperforms active management because active managers have higher fees (Investopedia, July 2022).

6. What do you do to minimize my costs?

A fiduciary will always try to minimize your costs. You will want to know how much money you can save because your advisor recognizes the importance of cost control in managing a portfolio.

Ask for some examples of the cost savings they’ve made with other clients. Then you can feel confident in your advisor’s expertise. Also, ask them how they work to minimize fees and how they help you pay less in taxes.

7. How often do you update my financial plan?

A financial plan should be a living, breathing entity. It should be changed when a major life event happens to change your financial situation. Moreover, a financial plan should be evaluated regularly because markets are constantly evolving. Ask how much time your advisor will devote to revising your plan.

questions to ask an investor advisor

Your asset allocation should be reviewed every few months. One of your responsibilities is to keep your advisor up-to-date with major life changes and changes to your financial goals. Ask your advisor to regularly review your long-term financial outlook.

8. Do you believe you can outperform the market?

An active manager may think they can outperform the market, but that’s for the short-term. Long-term data shows that passive management outperforms active investing.

Listen to what your advisor has to say about outperforming the market and then decide what’s best for you.

9. When I call with a question, who will I be talking to?

When you have questions or concerns about how your assets are managed, your advisor should be readily available to talk to you. After all, you’re paying the fees.

Sometimes, a quick decision has to be made about an investment or a change in your financial situation. A good financial advisor will be available to discuss options with you and act accordingly, promptly.

10. How can you help me feel secure that my money won’t run out?

Your financial advisor will work with you to devise a financial plan, which includes asset allocation and retirement planning.

You need to understand how your retirement plan will be able to meet your retirement goals. You expect your retirement income to cover all your living expenses. Ask your advisor to show you how your investments today will yield the income you will need in the future.

questions to ask your financial advisor about your portfolio

Why Pillar Wealth Management is the best financial advisor for your ultra-high net worth assets

If you are looking for a financial advisor, then you should consider Pillar Wealth Management. With over three decades of experience managing wealth for affluent clients, Pillar Wealth Management is a wealth management firm that offers financial advisory services nationally. They specialize in family financial planning for families that are worth between $5 million and $500 million in liquid assets. Reach out to them today to schedule your free consultation call with our co-founders Hutch Ashoo and Chris Snyder, who will help you decide how best to protect and manage your investments. Thank you for reading our article about questions for a financial advisor.

Authors

To be 100% transparent, we published this page to help filter through the mass influx of prospects, who come to us through our website and referrals, to gain only a handful of the right types of new clients who wish to engage us.

We enjoy working with high net worth and ultra-high net worth investors and families who want what we call financial serenity – the feeling that comes when you know your finances and the lifestyle you desire have been secured for life, and that you don’t have to do any of the work to manage and maintain it because you hired a trusted advisor to take care of everything.

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