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5 Questions to Ask a Financial Advisor

Quiz a financial advisor about their credentials and fees before hiring them.

Picking a financial advisor can be challenging no matter where you are in your investment journey.  

Here are five questions you can ask a financial advisor to find if they’re the right one for you.  

One, what’s your specialty? 

Some financial advisors focus strictly on investments, while others focus on different parts of financial planning including investments, insurance, and budgeting. You’ll want to keep this in mind depending on your goals.

Two, are you a fiduciary? 

Being a fiduciary means that an advisor has to put their clients’ interests ahead of their own. Morningstar’s director of personal finance, Christine Benz, says fiduciaries are legally obligated to recommend the "best" products for you given your situation. Nonfiduciaries aren’t held to the same standard.  

Three, how do you charge for your services?

Some advisors recommend products and receive commissions. Fee-only advisors don’t. They charge for various services. Fee-based advisors are a mix of both. They may charge fees and accept commissions. Advisors can offer their services on an hourly basis, per project, or take a percentage of their client’s holdings. Ask for a cost estimate. 

Four, what are your credentials? 

It can be hard to figure out what the letters after a financial advisor’s name really mean. CFP stands for certified financial planner, and CHCF stands for chartered financial consultant. Look for these when you are searching for a financial planner. A CFA is a chartered financial analyst. Look for this credential when seeking investment advice. 

Five, how often should we be in contact? 

You may want to be hands-on with your portfolio, act like it doesn’t exist, or anything in between. Set expectations with your advisor from the start to know what your time commitment will be. 

Ask questions to empower yourself as an investor. You may find a financial advisor who can help you reach your goals.