Hiring a Financial Advisor?

Here’s what to ask.



Treat your hunt for the perfect advisor like you would the hunt for an ideal employee: Interview several candidates, gather as much information as you can and ask for examples of their work.

Job Description 


• Help evaluating stocks, mutual funds, bonds, insurance options.
• Tax advice.
• Help matching investments with goals.
• Help putting a cost on goals and developing a plan to achieve them.
• Other tasks.

Credentials and Requirements

1. How do you earn your money? Fee-only, commission-based, hybrid? What will it cost me? 



2. What do you specialize in? 


• Retirement
• College Planning
• Estate Planning
• Special Needs
• Self-employment
• Small Business
• Other

3.  How long have you been doing your job?

4. What’s your educational background?

5.  What’s the average net worth of your clients? (Look for advisors who work with people like you all day long.)

6.  Do you provide advice in writing?

7. Is financial planning your only business? What other jobs do you do?

8.  What are the costs/fees/expenses of the investments you recommend? 

9.  What kind of disclosures are you required to show me? (Ask to see the advisor’s Form ADV-Part II. Ask if her firm has been audited by its regulatory agency and what the results were of that audit.)  



10.  May I speak with three of your clients?




Excerpted from The Family CFO: The Couple’s Business Plan for Love and Money (Rodale, 2004) by Mary Claire Allvin and Christine Larson.