The #1 Question to Ask Your New Financial Advisor

Readers from the blog that are considering hiring a new financial advisor are often very hesitant. They are intimidated and frankly don’t know what to say or ask. Ever feel like that?

When someone asks me what is the #1 question that should be asked when interviewing a financial advisor, this is what I tell them…(Watch the video to find out)

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Comments | 11 Responses

  1. says

    This is one of the best videos I’ve ever seen on a finance blog. I’ve not seen it said more clear and to the point than that. As you allude to, I think it is more important that you get a good, clear and honest answer, than it is how they are actually paid. Fabulous video.

    • Jeff Rose says

      @Evan

      Ooooh…that’s a good question.

      I think the second question would be based on investment selection/strategy. How do they go about choosing the investments for my specific portfolio.

      At a close 2nd would be expected service.

  2. says

    Great question. As a former commission-based adviser, it’s a question that would have had me stumbling for words. It’s also the reason I ultimately changed careers. When you work for commission, you are encouraged by your firm to push products that earn the highest commissions, not products that are necessarily ideal for your clients.

    • Steve Baker says

      That IS a good question Jeff.
      I am a commission-based advisor, and am fortunate to work for a company that stresses ALWAYS do what is best for the client without regard to the commission. I would have it no other way.

    • Jeff Rose says

      @ John

      Fair point. As a fiduciary myself, it’s hard for me to disagree. My only concern is how many consumers/clients actually know what a fiduciary really is? I would safely assume not many.

    • says

      Knowing specific obligations of a fiduciary will certainly serve your interests well in an interview with a potential adviser. It would definitely show them that you’re knowledgeable enough to be on guard against self-serving advisers.

      I especially like Jeff’s insight about the method of payment because it cuts to the heart of how the adviser will be motivated and also let’s you know your exact obligation to him. I like that a straightforward answer has to come. Anybody can give promises, smiles, and handshakes, but how they are paid and how they manage the investments are the basis of the advising relationship.

      Similarly when it comes to credit cards, you will get a flurry of advertisements about perks and small incentives, but the interest rate may be much more valuable to know.

  3. says

    I wish I would of asked that question before I had trusted a former adviser!

    Fiduciary capacity sounds like a great dessert!

    Thanks Jeff for your straight forward advice for those of us (my client base is High School and College students) that do not know what we don’t know!

    Karyn

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