9 Questions to ask a Financial Advisor

Come prepared when you interview a potential financial advisor.

Before turning over your nest egg to a financial advisor, it's wise to ask a range of probing questions.

After all, the advisor-client relationship can be one of the most intimate professional relationships of your life.

An advisor should be there to guide and reassure you when everything is sailing smoothly but, also let you know when you hit rough waters or need to change direction.

Here are the questions to ask financial advisors before hiring them:

1. Are You a Fiduciary?

Is your financial advisor/planner a fiduciary? A fiduciary is a financial advisor who is required to act in your best interest at all times. A fiduciary cannot recommend a strategy or investment unless it is the best available option for you.

Nonfiduciary advisors, on the other hand, may provide recommendations that are "suitable" for your situation. Nonfiduciary advisors could recommend a more expensive product because they get a commission for it.

Working with a Fiduciary is the relationship you want.

2. How is Your Advisor Compensated?

Compensation can be an uncomfortable subject to discuss with a financial advisor, but don't be afraid to come right out and say it: How do you get paid?

You deserve to know how your current or future advisor will make money off your account/relationship. And chances are they've been asked before. Conflicts of interest are one of the biggest problems in the industry because some advisors may be more interested in earning a higher commission than ensuring their client's financial well-being.

Don't be afraid to push this issue until you get a clear answer and If the answer you get is vague or takes more than a minute to answer, walk away. You should also know what the all-in costs are.

3. Why Did You Recommend That Investment?

Some firms in the industry have fee-sharing arrangements with other companies and can receive kickbacks. This might mean your financial advisor is heavily motivated to sell a certain company’s investment products over another. You need to ask your financial advisor if he or she is willing to invest in the same products that they recommend to you.

4. Do You Have a Sales Quota?

Believe it or not, some financial advisors have monthly sales quotas that they need to hit? It means your Financial Advisor has sales goals to reach and they will be compensated if they reach those goals. The quota might come in the form of accumulating a certain level of assets with the firm or garnering a certain number of new clients. It could be a quota for selling insurance or other products.

Quotas can also be targeted at how much in fees the advisor generates for their firm. Think about how sales quotas can impact your financial advisors behavior as they reach the end of the month. Is your Advisor selling you a product in order to reach their goals or because it is in your best interest?

With Rockwall Wealth Advisors, you never have to worry about Sales Quota’s. We want to ensure that it is the best fit for everyone involved!!!

5. What is Your Investment Strategy?

Does your financial advisor understand what your specific needs are? Are you on the same page and are they listening to you? Ask your financial advisor what his or her investment strategy is and most importantly, how it is customized for your needs. Investment strategies also change over time as risk tolerance and life changes. That is why we create a custom experience for each client we work with at Rockwall Wealth Advisors.

6. What’s Important to You?

Your relationship with your financial advisor is likely one of the most important and long-lasting financial relationships you have.

Your advisor will likely be involved in many of your most personal decisions. As such, you'll want to work with someone you connect with on a personal and professional level. An advisor with whom you have a good rapport and who seems to share your values could be a positive sign for the future.

7. What Service Can I Expect From You?

Figure out what kind of on-going service you can expect from your financial advisor. How often can you contact them? What can you expect in response times? Can you chat with them online or do you have to schedule meetings with them? Another important consideration is performance reporting. What materials do they provide so you can track how you are doing? We connect with and communicate on a regular basis with all of our clients. Rockwall Wealth Advisors is here for you!!! We do things a little differently and that involves putting you first.

8. Where do you custodian your accounts?

Rockwall Wealth Advisors wants to use companies that have great reputations and track records. That is why we use Charles Schwab, TD Ameritrade, Fidelity, and Pershing to hold our clients assets. This is a great question to ask however because you want to make sure your money is always in good hands.

9. Is there a contract if I decide to work with you?

No! This is an “at will” relationship. Circumstances change all the time. You can Hire us today, you can fire us tomorrow. We like to keep it simple.

In Summary

Are you happy with your current financial advisor or investment professional? Great! Keep your current advisor and continue to meet regularly with them.

Or Maybe you already have an advisor, but these questions have made you realize your current financial advisor isn’t a great fit for you and your needs. It’s important to find a financial advisor you can trust, and that may mean it’s time to move on.

If you’re looking to make a change or just getting started with investing, lets talk. We take a complementary approach so there is 0 risk for you. It’s a free way to find out if we are a good fit.

To learn more, visit www.RockwallWealthAdvisors.com or feel free to call or email us at 214-923-5237, contactus@rockwallwealthadvisors.com !!!