Looking for a Financial Advisor? 5 Questions to Ask First

Whether you’ve always taken a DIY approach to managing money or you’re looking to work with someone new, finding the right financial advisor to address your unique needs can be challenging (even a little intimidating).

Yet, working with the right professional can have a lasting impact on your financial wellness and future security—as long as you first do your research and understand what to look for in a financial partner. To help you on your journey toward a brighter and less stressed financial future, we’ve identified five questions to ask when meeting with a financial advisor for the first time.

#1: “How Can You Help Me Achieve My Financial Goals?”

If you thought financial advisors were solely focused on managing the money in your portfolio, you certainly wouldn’t be alone. This is a common misconception, as many top financial advisors provide services that reach far beyond investment management. From retirement planning to risk management, education funding, tax planning, and more, experienced advisors can address every facet of your financial life.

When talking with potential advisors, ask them how they help support your financial life—beyond putting your money into a portfolio. An advisor should take the time to really understand your financial needs, concerns, values or priorities, and long-term goals for the future. From there, they can help define what “financial security” means for you and develop a comprehensive plan to achieve it.

Money and investment management are core components of a financial advisor's work, but they should be treated as tools to help you achieve your dreams—not the sole focus of your advisor-client relationship.

#2: “What Is Your Fee Structure?”

Different firms charge clients in different ways. This is why it is so important that the firm is transparent and upfront about how they earn their money.

It's also important to understand the significance of the "fiduciary standard of care." Advisors operating under this standard are obligated legally and ethically to prioritize your best interests. Otherwise, the advisor may be incentivized to favor certain investment products even if they don’t align with your values or financial goals.

Depending on the services provided, an advisor may charge clients with:

●     A one-time financial planning fee

●     An hourly advisor rate

●     A percentage fee on assets under management (AUM)

●     Commission on the sale of certain products

●     A combination of any of the above

No matter the fee structure, there are two things you’ll want to get some clarification on when meeting with a potential advisor:

What’s included? Fee structures are confusing in the financial services industry, since they lack uniformity and clarity. One advisor may include financial planning within their AUM fee, while another may charge a separate fee on top of the AUM fee. Be sure to ask the advisor what, exactly, is included in the cost (and what isn’t).

Are you a fiduciary? If an advisor is held to the fiduciary standard of care, that means they must act in your best interest. On the other hand, advisors who are not fiduciaries may prioritize making higher commissions on certain products, for example, even if they don’t align with your goals or best interests. It’s always good to understand what ethical standard an advisor is held to and what underlying motivators may be present in the relationship.

#3: “What Services Do You Provide?”

Many people are looking for a financial advisor who can provide comprehensive services, which is really the most effective way to align every aspect of their finances with their life’s purpose and goals.

The problem is, not all advisors operate in this way. In fact, some advisors operate in a fairly limited capacity, despite claiming to offer wide-ranging services. It’s not uncommon for professionals to call themselves advisors, when their primary focus is selling insurance for an insurance company. Or, some advisors act more in a broker or money manager capacity, meaning their priority is providing portfolio recommendations.

An effective advisor should be able to not only address the areas you’re concerned with (retirement planning, taxplanning, etc.), but also serve as a collaborative partner who understands the intricate relationship between life and wealth. You should feel empowered to consult with your advisor throughout your lifetime and know you will get trusted, hands-on guidance tailored to your unique circumstances.

#4: “Are You an Independent Advisor?”

Name recognition is powerful, especially when it comes to trusting another professional to manage our money. For that reason, you may initially gravitate toward large institutions, like nationwide banks or popular brokerage firms, to help address your financial concerns.

While there are many investors who get what they need out of working with large institutions, keep in mind that these banks don’t always provide the type of hands-on care that more independent firms can offer.

In addition, independent advisors have much more flexibility to select from an open market of investment and insurance products, whereas most institutional advisors are limited to their firm’s proprietary products or partner products. Being product agnostic allows the advisor to select the solutions that best align with their client’s needs.

#5: “Can We Work Together Virtually?”

Most aspects of your financial life are digitally accessible—your bank account, brokerage account, 401(k) portal, credit card, and even insurance policies can likely all be managed online.

So, should you compromise the ease and accessibility of digital access to accounts just because an advisor can’t deliver a paperless client experience? It’s up to you, but today’s top advisors have found ways to enable a digitally driven client experience that keeps things simple and easy.

Many modern firms give clients access to an online portal, which allows them to view account statements, balance sheets, monthly budget snapshots, and more. Some even allow you to store virtual copies of important documents, such as your will or passport.

If you’d like to work with your advisor in more of a virtual capacity, ask them about their digital capabilities and infrastructure. If they’re a more traditional, pen-to-paper type firm, they may not deliver the experience you expect from your financial partner.

Are You Searching for the Right Financial Advisor?

Year after year, money is one of the top stressors for Americans—and the past few years have certainly been no exception. With professional guidance from a trusted and knowledgeable advisor, however, your money concerns can be addressed instantly and with more clarity.

For more information on finding the right advisor to address your unique financial concerns, download our Consumer Awareness Guide now. You can also consult directly with the Conway Wealth team by emailing info@conwaywealthgroup.com or calling 973.285.3640.