5 Critical Questions to Ask Your Financial Adviser
You’re trusting your financial future with this person, so you must be crystal clear on these key issues.

As an astute investor and reader of Kiplinger’s you’ve no doubt read much about the newly implemented Department of Labor Fiduciary Rule, but are you clear about its impact and what it means to you? Unfortunately, there is no easy explanation as the rules are complex and still need a great deal of clarification. However, one component of the rule is reasonably straightforward: It requires any broker or adviser advising on retirement accounts to act impartially and with the investor’s best interest in mind at all times, a so-called impartial conduct standard. Of course, this too is a bit convoluted and confusing.
In an effort to simplify this, below are five critical questions to ask your adviser or broker and answers that could raise some red flags:
1. Fees & Commissions: How do you earn your fees and commissions?
While this may seem simple and straightforward, the industry has become masterful at hiding compensation. Watch out for unclear answers or an inconsistent compensation arrangement. For instance, if the answer is something along the lines of, “It depends on what strategy or investment is selected,” make sure to probe further. Also, make sure to inquire if there are “lock-up periods” or back-end surrender charges to any strategies or products being recommended.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
2. Personalized Advice: Why did you select this portfolio/investment for me?
Any answer that does not clearly include your specific investment objectives is likely an indication that the adviser is thinking about his or her fees and commissions instead of you.
3. Ongoing Portfolio and Planning Advice: How will you help me stay on track?
This question serves two purposes. First, it helps detail what services the adviser commits to providing on an ongoing basis. Second, it should lead into a discussion about specific actions. We know that things will change over time and that the market might throw you a curve ball, that’s why it’s important to understand how the adviser intends to act in various environments. Asking how or what he or she and the firm did for clients during the 2008-09 financial crisis could prove illuminating.
4. Succession Planning and Continuity: Who will be watching my portfolio when you are on vacation or if something were to happen to you?
This goes to the depth of the team around the adviser. While this is a bit more subjective, I much prefer working with a team or an adviser who relies on an investment committee than a single practitioner.
5. Client Profile: What does your existing clientele look like?
Every adviser gravitates to a certain type of client. While there is no “better or worse” client, it is important to work with an adviser who has an expertise and is used to working with someone like you. This will help ensure that the adviser’s services and philosophy are generally aligned with your needs and goals.
In addition to the questions above, make sure to ask for the adviser’s credentials (which licenses and other accreditations they have), his or her experience level (i.e., how long they have been a financial adviser) and a review of their regulatory history.
Following these steps might not ensure a positive outcome or fruitful relationship, but it might help avoid a poor one.
This column is the fifth in a six-part series on investor education.
- Column 1 – Understanding your goals
- Column 2 – Why benchmarking to the S&P 500 is not a good strategy
- Column 3 – It’s about cash-flow, not returns
- Column 4 – How much are you paying for your portfolio?
- Column 5 – 5 critical questions to ask your financial adviser
- Column 6 – ‘Senior Inflation’ the not so silent retirement killer
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
Oliver Pursche is the Chief Market Strategist for Bruderman Asset Management, an SEC-registered investment advisory firm with over $1 billion in assets under management and an additional $400 million under advisement through its affiliated broker dealer, Bruderman Brothers, LLC. Pursche is a recognized authority on global affairs and investment policy, as well as a regular contributor on CNBC, Bloomberg and Fox Business. Additionally, he is a monthly contributing columnist for Forbes and Kiplinger.com, a member of the Harvard Business Review Advisory Council and a monthly participant of the NY Federal Reserve Bank Business Leaders Survey, and the author of "Immigrants: The Economic Force at our Door."
-
Three Reasons to Skip the 401(k) Super Catch-Up
Older workers may want to forgo the 401(k) super catch-up and put their money to work elsewhere.
By Maurie Backman Published
-
10 Cities Hardest Hit By Inflation
Was your city hit harder by inflation? Here are the 10 cities where residents saw prices rise the highest.
By Sean Jackson Published
-
Stressed About Doing Your Taxes? Use These Easy Tips to Cope
If the thought of filing your taxes puts you on edge, you're not alone — nearly 65% of Americans say they're stressed during tax season. Here's how to cope.
By Cynthia Pruemm, Investment Adviser Representative Published
-
Three Ways to Get Your Finances in Better Shape
Want fitter finances this year and beyond? Start by making full use of all your workplace benefits — from 401(k)s to budgeting apps and wellness programs.
By Craig Rubino Published
-
Rethinking Income When You Retire: No Paycheck, No Problem
When you retire, you'll need to adjust to the reality of depending on assets instead of a regular paycheck. For that, you'll need a new financial strategy.
By Joel V. Russo, LUTCF Published
-
How to Support Your Parents Without Derailing Your Finances
Putting your aging parents' financial house in order can give you a clearer picture of where they need support and how to balance that with your own plans.
By Vincent Birardi, CFP®, AIF®, MBA Published
-
Here's How Estate Planning Can Make Your Retirement Easier
These estate and legacy planning tools and strategies can help lower your taxes, protect your wealth and more, leaving you to relax during your golden years.
By Cliff Ambrose, FRC℠, CAS® Published
-
Why 'Standard' Digital Background Checks Can Be So Unreliable
Missing online data, as well as stringent federal and state privacy rules, make it difficult to discover a prospective employee's or tenant's criminal past.
By H. Dennis Beaver, Esq. Published
-
Are You a High-Income Earner? Three Unexpected Reasons to Save More Than You Think You Should
High-income earners sometimes put off saving because they think they have plenty of time and money to do it later. That's not always the case, though.
By Eric Roberge, Certified Financial Planner (CFP) and Investment Adviser Published
-
How Financial Professionals Can Empower Their Female Clients
These three strategies can help advisers better serve women as they navigate unique financial challenges and build confidence.
By Jake Klima Published