How to Interview a Financial Advisor

Let’s say you find yourself with some money. A fair amount of money. It could have been the result of many years of work, an inheritance, or even a lucky break. But here you are, with money in the bank. Being the responsible person you are, you know that the next step is to find a professional who can help you manage your wealth.

Then it hits you: “How do I know what questions to ask in order to find the right one?”

A little homework now can save you a lot of headaches later. After all, when it comes to your money it’s important to find someone you can trust, right? Asking questions will help you to get a sense of an advisor’s level of expertise, incentives, style, and legitimacy… and these are all important in deciding if you should hire that person.

Fortunately, we’ve spent thousands of hours interviewing financial advisors around the country.  As a result, we have compiled an excellent list of things that you can ask each potential candidate.

Here are the top questions you should ask a financial advisor before you ever decide to hire them.

Why ask this? Although there is no true "right answer" here, you need an advisory practice that, at its core, wants to understand your goals, aspirations, risks, and fears before making any recommendations. This is often referred to as a “financial planning-centric” practice, as all decisions stem from a holistic understanding of your financial life.

You want to steer clear of advisors that go straight into a discussion about their stellar stock market performance or their ability to “pick stocks and bonds."  The reality is that it is extremely difficult for anyone to beat the market consistently. Due to this, a slide deck showing how someone performed in 2009 doesn’t really tell you anything valuable.

We are big believers that the value-added of a great advisor is not to “beat the market,” but rather to be your household CFO.

Why ask this? If you want to find out how people are most likely going to behave, you need to understand their incentives. As discussed in Financial Advisors, the Tell-All Series knowing how advisors make money can help you identify the payment options that are most suitable for you. You'll also be able to establish the most aligned incentives for the advisor.

For instance, if an advisor works at an insurance company and he/she gets paid high commissions for selling whole life insurance, there’s a good chance whole life insurance will come up as a suggestion -- even if it’s not necessarily the best product for you. Again, it’s all about incentives and fiduciary duty.

Why ask this? This goes back to our point on incentives. We’ve found that the incentives of independent advisors, who have no association with large broker houses, are more aligned with the interests of their clients. This is because their practices don’t sell any financial products of their own.

The answer you are looking for here is "no." To learn more, you can read Financial Advisors, the Tell-All series. Part 2: Brokers vs. advisors.

Why ask this? Your ideal advisor is one whose expertise lies in the areas in which you need the most help. For instance, an advisor may focus on Social Security and Medicare, but you’re 30 years old! You may need more help figuring out how much home you can afford or how to reach your long-term goals. Thus, that advisor is probably not the best match for you!

Other examples of financial planning services questions include:

If you’re having trouble figuring out which services you need, read Financial Advisors, the tell-all series. Part 4: Do I need a financial advisor?

Why ask this? There is no perfect answer here, but there are some very good responses and some very bad responses. The most important thing you want your advisor to have is a well-thought-out, evidence-based process. If  they sound like they are “winging it" or start discussing their stellar market performance when you ask this question, run for the hills!

Advisors simply don’t have the time to be your household CFO and be great stock-pickers. Great advisors understand that the key to success lies in first understanding the required returns you need to accomplish your specific goals. If those returns seem to have a reasonable margin of safety (considering historical return profiles for a well-diversified portfolio) then -- and only then -- are they able to pick the right mix of assets that strives to deliver YOUR required rate of return, with the minimum portfolio risk possible.  

Why ask this? Although this question should only be asked after the advisor has had a good chance to ask you about yourself, it ultimately cuts right to the heart of the conversation. Their answer should not only show that they have a good understanding of your situation, but also how they can help improve it. 


Why ask this? A good indicator of a financial advisor's expertise is whether they have past experience helping other, similar clients. If they fumble over the answer or if they don’t provide clear examples, then this could be an indicator that they are not familiar working with clients who have similar needs to you. This is obviously a big deal.


Why ask this? Knowing where you stand financially is important, and you want an advisor who keeps you in the loop along the way. Ask questions like:


  • How often do you expect to be in contact with me: once a year, monthly, or more?
  • Do you offer web services and portals?
  • Do you offer insight newsletters and reports?


At this stage, it may also be worth asking for examples of financial plans and asset allocations. Doing so will allow you to understand how their philosophy might actually materialize as a financial plan.

It is important to build a strong and open relationship with the advisor you select. Doing so will ensure your money is best protected and give you the best chance of achieving your financial goals.  

These are just some initial questions you should consider discussing. At Zoe, we spend hundreds of hours a year interviewing advisors. Of these, only the top 5% are accepted onto our network. So if you’ve used our matching algorithm, you can be certain that your advisor match has the right incentives, relevant experience, skills, processes, and technology to do a great job. With that said, it is just as important that you are empowered with the right questions to ask. Your confidence and trust is just as vital to the success of the relationship.

If you want to learn more about how we vet the advisors in our network, to ensure they are of the highest caliber, you can read more about our selection process here.

Is it now time for your follow-up call with a potential advisor? Check out our Top 10 Questions to ask an Advisor During A Second Meeting.

Ready to Get Started?

Real financial planning should pay off today. Not in 10 years time