6 Questions to Ask a Financial Advisor Before Hiring One

Be smart about who manages your life savings. Start by asking these key questions before hiring a consultant.

Published On Apr 26, 2022 | Updated On Mar 07, 2024


There’s nothing wrong with asking for help if you're struggling with something. And this holds true even when it comes to money. If you’re having a tough time managing your finances, hiring a financial advisor can be a great idea. They are professionals and will help you create a plan for meeting your financial goals and guide your progress along the way. They can help you save more, invest wisely or reduce debt. 

Good investment advice is never free but before you zero in on an advisor, make sure to do your research, suggests Priya Sunder, director, PeakAlpha Investment Services Pvt Ltd, a 17-year-old Bengaluru-based wealth management firm. “A good financial advisor will ask you what your goals are, check frequently if you’re meeting them, make sure you’re getting optimal returns that are in line with your risk appetite, ensure you are tax-efficient, etc. After all the success of a financial advisor is measured by the success of your goals.”

How do you find an advisor who is a good fit for your money needs? The first step is to ask friends and family for referrals. In particular, get recommendations from people whose financial needs, outlook or stage of life is similar to yours. Before contacting planners, look them up online and on LinkedIn to get a sense of what each firm is like.

Before turning over your hard-earned money 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.

Here are a few vital questions to ask financial advisors before hiring them:

You may have probably encountered this emphatic financial buzzword "Fiduciary" plastered on financial websites. But what does it mean and how do you know if an advisor adheres to that standard? 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 could recommend a more expensive product because they get a commission for it. So the answer to this question should be “yes”. 

A key question to ask financial advisors is about their exact qualifications. Most often financial professionals can have a confusing list of initials behind their names. “Ideally look for registered investment advisor or a CFP (certified financial planner) or Investment Advisor Level-1 and Level-2 certifications from National Institute of Securities Markets (NISM). Registered Investment Advisors must qualify themselves with a postgraduate degree in specific subjects (accountancy, banking, business management, capital markets, commerce, economics) and have at least five years of relevant experience (two years for persons associated with investment advice),” explains Sunder.  


Current or previous clients are a great source of information if you want to find out more about a financial advisor. Financial planners should be comfortable giving you references of clients whose money they have managed. If they aren’t, this could be a warning sign. “It’s a good idea to talk to some of their clients about their experience. This should help you separate the wheat from the chaff. It will give a good idea of their performance, work ethic, behaviour and overall satisfaction levels. If the financial advisor has done an excellent job, then giving contact information for references should not be a problem,” says Sunder. 

Look for an advisor with experience helping clients through market volatility and uncertainty. It's easy to do well for your clients when the stock market is on an upward trend. You should look for an advisor who has at least four years of experience in the areas of financial planning in which you are looking for help. “This proves that they have stood the test of time, and have accumulated years of experience and the trust of their customers. You should also ask other questions like what is their typical clientele like, their personal philosophy around financial planning, processes they employ, etc,” believes Sunder.

Don’t be shy about asking how you will be charged so that you are not saddled with any hidden fees or a pricey bill for market transactions. Check whether it will be a fixed annual fee, a percentage for assets under management, or whether they make money from selling you a specific product. Not only should you know how much the service will cost you, but it can help you determine whether they have an incentive to sell you things. The advisor should provide you in writing with all information in advance about all fees and costs to help you make an informed decision. Do not consider any advisor who does not explain all expenses to you openly and clearly.  


Before you commit to an advisor, you should know their process of interacting and engaging with clients. Put another way: How much access will you have to the advisor? How often will you meet? Is she available for phone calls or emails outside of scheduled appointments? These questions will help you understand how your financial advisor will work with you and if that system is good for you. Choose an advisor whose schedule works for you.

Lastly, a bond of trust and mutual respect is absolutely essential: After all, this is someone with whom you will be sharing confidential and sometimes highly personal aspects of your life. You want someone who you can trust, communicate consistently, understands your goals for the future, and helps you make wise choices. Hopefully, these questions should help you arrive at the right one.  

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