Questions To Ask When Interviewing A Financial Advisor

When answering a prospective clients questions about my financial planning firm, I was reminded how difficult it is to interview a financial advisor.

When answering a prospective clients questions about my financial planning firm, I was reminded how difficult it is to interview a financial planner. Asking the right questions is important, but so is knowing what the answers mean. The terms “financial planner”, “financial advisor”, and “financial planning” are not protected by any type of regulation, so every professional has their own interpretation of what it means to be a financial services provider. Some financial advisors are not advisors at all, but merely salesmen using the term “advisor” to fool their customers into thinking they are clients. Others may only provide investment management, insurance products, or another singular focused service.

What questions should you ask when interviewing a financial planner?
NAPFA, the largest national organization of fee-only financial planners, has put together a wonderful guide with 26 questions to ask every financial advisor you interview. Feel free to send these questions to financial planners you are considering interviewing, so that you don’t waste your time interviewing service providers that don’t meet your needs.

Click here to download the guide

Before selecting a financial advisor, you should have the answer to every single question in this guide. Most importantly however, read through the “Answer Key” on pages 9-11. This key will give you some context about each question, so that you know what the financial advisors answers really mean. Many financial service providers are great salesmen, and can make things sound much better (or different) than they really are. Stick to this guide, get all of the questions answered, and you will be armed with the knowledge you need to hire a financial planner.

In my opinion, the most important question in this guide is Question 9
Question 9:
Will you sign the Fiduciary Oath below?
Yes _____
No   _____

The advisor shall exercise his/her best efforts to act in good faith and in the best interests of the client. The advisor shall provide written disclosure to the client prior to the engagement of the advisor, and thereafter throughout the term of the engagement, of any conflicts of interest which will or reasonably may compromise the impartiality or independence of the advisor. The advisor, or any party in which the advisor has a financial interest, does not receive any compensation or other remuneration that is contingent on any client's purchase or sale of a financial product. The advisor does not receive a fee or other compensation from another party based on the referral of a client or the client's business.

What the Fiduciary Oath means to you - the client
• I shall always act in good faith and with candor.
• I shall be proactive in my disclosure of any conflicts of interest that may impact you.
• I shall not accept any referral fees or compensation that is contingent upon the purchase or sale of a financial product.


Although many advisors will tell you they will act in your best interest, only a small percentage of them would be willing to print and sign the above oath on company letterhead.

Don’t forget to check up on your financial advisor - Video Guide

You worked very hard to get to where you are today financially. Don’t just turn over your finances to an advisor before you have all the facts.

Have you ever asked your financial advisor these questions? Would your financial planner sign the Fiduciary Oath? Are there any additional questions you think should be added to the guide? Feel free to share your thoughts!

Alan Moore is a fee-only financial planner and founder of Serenity Financial Consulting in Shorewood WI. Connect on Google+. You can contact him at alan@serenityfc.com, 414-455-5313, or visit his website at www.SerenityFC.com. Want more education? Download your free guide to the “10 Easy Steps To Securing Your Financial Future Today.”

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

Alan Moore, MS, CFP® January 15, 2013 at 08:08 PM
Hey Craig, Most of the legislation that was introduced got watered down thanks to the very well paid lobbyist that work for Wall Street insurance and investment companies. All investment advisors are required to provide clients with an ADV Part 2 which has information about compensation buried inside. Feel free to e-mail me and I will send over a copy of mine... see how long it takes you to get through it! 401(k)'s are now required to disclose fees, and you should have received a disclosure statement at some point. If not, reach out to the plan administrator to get a copy of the fee disclosures.
Jim Kube January 16, 2013 at 12:37 AM
Alan, Thanks for the guide - bookmarked it. Should come in handy. Appreciated!
NRAMember January 17, 2013 at 04:06 PM
President Obama's Cat-Food Future For Retirees-The Obama Economy: Americans are drawing down their 401(k)s for non retirement needs in record numbers, just as Social Security goes bust. This portends poverty for millions as the White House fiddles. Cat food, anyone? One out of four U.S. workers with 401(k) retirement savings accounts has been forced to cash them out or borrow from them at high costs just to stay solvent.


More »
Got a question? Something on your mind? Talk to your community, directly.
Note Article
Just a short thought to get the word out quickly about anything in your neighborhood.
Share something with your neighbors.What's on your mind?What's on your mind?Make an announcement, speak your mind, or sell somethingPost something
See more »