Best Questions for Millennials, HENRYs and Women to ask when Interviewing a Financial Advisor

Shari Rash
July 24, 2022
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Best questions for millennials, henrys, and women to ask when interviewing a financial advisor

If you’re asking yourself questions about your financial future, your head is in the right place! The next step in your journey might be contacting a financial advisor.

A financial advisor does more than just trade stocks. In fact, they can (and in my opinion, should) help you with many different aspects of your financial life: from tax and estate planning to managing your investments and strategizing your spending.

There are so many advisors out there.

The problem you face is that financial advisors are a commodity. Throw a rock down Main Street America and you’ll likely hit a few advisors.

There are so many advisors that represent different companies from the big insurance companies (and are they advisors or life insurance agents?) to the big companies on wall street (are they stock brokers or do they give advice as well?) down to Bob Smith, Financial Advisor (what company is he with?). They all seem different, but all seem similar at the same time.

It is hard to tell advisors apart, understand the services they provide and determine if they are the right fit for you. Plus you need to make sure they are a good fit for you now and have the ability and provide the services you need for the future.

You need to find the right advisor to work with.

Finding the right financial advisor is important since you will most likely be working with this individual or firm for hopefully decades. You will go through many life changes in adulthood. Life changes usually mean money changes and your advisor should be a trusted resource that is right there along for the ride with you.

When you are ready to work with an advisor, ask your friends and family if they have an advisor that they work with and would recommend. Remember though, just because your loved one works with an advisor doesn’t mean he or she is going to be right for you. But it’s a good place to start.

Do some googling too. Not just “financial advisors near me” but instead “financial advisor for millennial families” or “financial advisor for female breadwinner” or “financial advisor for stay at home mom.” Be specific. You don’t want an advisor that works with anyone with a pulse, you want an advisor that specializes in people like you! Have a list of three advisors, and start interviewing them.

You should interview advisors to find the best one for you.

An introductory meeting with a financial advisor should be an interview for both of you. You need to decide if they are a right fit for you and they should also make that same determination. It’s kind of like a first date.

During your initial interview with an advisor you should have questions prepared. Lucky for you, I have done the hard work for you!

Not only am I sharing the seven questions I think you should consider asking potential financial advisors to determine if they are the right fit for you, but I am also sharing the answers that are potential red flags.

Ask a Financial Advisor: What type of client do you work with?

Not all financial advisors serve the same customer base. Some prefer to work exclusively with high-net-worth individuals or business owners or single women. Asking the prospective financial advisor what clientele they serve will help you determine if they are a good fit for where you are in your life currently.

Additionally, inquire about their current client load. Are they accepting new clients? What is the turnaround time on investments and strategies? Financial advisors are in high demand due to recent economic events, making it vital that you determine if they are able to meet your timeframe demands.

Red Flag: I work with pre-retirees, retirees, those that just started working, women and business owners.

You’ve heard of Jack-of-all-trades, master of none before, right? Same rings true for financial advisors. Everyone, depending on the phase of life they’re in, has different financial needs. A person that is three years away from retirement is in a much different financial mindset than someone who is three years into their career. The investments, financial recommendations, planning will all look completely different. You want to work with an advisor that is really good at planning for the phase of life you’re currently in. A 23 year old doesn’t need an advisor that is good at retirement income planning, they need an advisor that is good at helping them accumulate, not just for retirement but for whatever life is going to throw at them.

Financial Essentials for Young Families


The financial services industry has migrated from a suitability mentality to a best interest mentality.

Being suitable means that an advisor would just have to justify if a product is appropriate for their client. So, yes, it’s a good product, there may be better options out there, but it’s good enough.

Fiduciary advisors have to show that a product is in the client’s best interest. A Fiduciary Financial Advisor is required by law to act in their clients best interest. To put it simply, the Fiduciary sits on the same side of the table as you.  Believe it or not, some advisors are not legally obligated to work in your best interest.

It is not easy to be a Fiduciary, there are legal hoops Fiduciary advisors have to jump through. They made their job a lot harder by choosing to be a Fiduciary, but that’s a good thing for their clients.

Red Flag: The advisor you’re interviewing is not a Fiduciary.

Ask a Financial Advisor: How Much Does It Cost to Work with You? And How Do You Get Paid?

As financial services have evolved, so has the way advisors get paid.  The original way advisors made money was through commissions; they would earn a sales charge when they sold a product. Now many advisors are charging fees for management and services.

How advisors get paid: Commissions

Some products offered higher commissions than others and unfortunately some advisors chose to sell their clients higher commission producing products, even if it wasn’t the best product for the client (even though it was suitable).  

Commissions can be paid by the product company oy by the client. Just because the product company pays the advisor’s commissions, doesn’t mean the product is free to you, commission based investments often have high internal costs.

Thankfully, the industry is evolving and many advisors now earn their compensation through fees.

How advisors get paid: Asset Under Management Fees

Fiduciary and fees go hand in hand. Fee-based advisors make the same amount of money no matter the product the client ends up with. Fee-based advisors will charge a percentage fee based on the assets under management.

This is a benefit to the client because a fee-based advisor is not motivated by commissions or to sell a certain product, because no matter what the advisor makes the same amount of money.  

Most fee based advisors have a sliding scale, so the larger the account, the smaller the percentage they charge. Let’s say you have $100,000 IRA and the financial advisor that is managing it charges a 1% asset under management fee. This means that you would pay $1,000 in advisory fees. You would pay the $1,000 in advisory fees whether you chose investment portfolio A or investment portfolio B. The advisor has no financial motivation to steer you one way or another. They are obligated to present to you portfolios that are in your best interest.

When an advisor charges an Assets Under Management (AUM) fee, the fee is deducted from the account. Be sure to confirm where the fee is coming from. If you would rather be billed and pay a check for your advisor fees, ask the advisor if that is an option.

How Advisors get paid: Fee Only

Fee-only advisors charge a flat fee. This can be an annual fee, an hourly fee or a fee for a specific service that you would pay out of pocket, not from your investment account. Some advisors now are charging fees based on a percentage of clients income!

This is a good thing because it is very clear what you are paying. You are paying the advisor for their advice, which is not clouded by commissions.

Costs are a crucial area to understand and it is important for your advisor to be transparent with you about what you’re paying for service. The more transparency you have in the billing, the better. You work hard for your money, and you need to make sure it’s not being eaten up by fees. Be sure you understand any internal costs of your investments as well. This could be a fee assessed for each trade transaction, a required annual meeting fee or a cost inside of the investment in addition to management fees.

Red Flag: The advisor is not clear and concise on their fees and how much you will pay for services.

If they can not clearly explain how they get paid and how much their recommendations and services cost you, then you may want to second guess working with that advisor.

Financial Essentials for Young Families

Ask a Financial Advisor: What is Your Value Proposition? Meaning: Why is your cost “worth it”?

You need to leave an introductory meeting understanding why an advisor’s clients work with them, what they can do for you and how they are going to make your life better.

A financial advisor should have a mission statement. The mission statement is the reason why they get out of bed everyday to serve their clients. Ask them what their firm’s mission is.

Pay close attention to their answers to see if there are any differentiating factors between advisors or is everyone just repeating the same jargon?

Did you smile or nod your head after they told you their mission? That’s usually a tell tale sign that what they said just resonated with you.

Other things to ask to determine if their cost is “worth it”:

Do they offer investment strategies that align with your beliefs?

Are they able to provide you a customized plan?

What else do you provide besides managing my money?

How often do we meet?

How are you going to make my financial life less overwhelming?

Do you communicate via email, text, newsletters?

Do you take phone calls?

You want to be sure that you are gaining the most value from the fees you are paying. This involves understanding the advantage each advisor offers you.

Red Flag: The advisor can not articulate the value he will bring to your financial life.

Ask a Financial Advisor: What are All the Services You Provide?

Knowing the services each advisor offers is also critical when interviewing financial advisors. Some financial advisors limit the scope of their work to just portfolio management. They just want to manage your money and all conversations revolve around performance and what the markets are doing.

Others will  provide financial planning services in addition to managing your investments.  A good financial advisor helps you with all areas of your financial life. From putting together a spending strategy and savings plan based on your income and goals to making sure you have enough insurance to saving for retirement.

During the financial planning process the advisor can assist you with any area of finances you may be struggling with such as: eliminating debt, establishing an emergency fund, and understanding investment options in 401k. An advisor that focuses on financial planning will show you where you are today and put a plan together to help you achieve your goals for the future.

Consider all of the needs your household has when it comes to money: investment advice, insurance recommendations, estate planning, college planning, tax planning, budgeting assistance, retirement planning, debt management and more. Which of these services are you looking for? Identifying ways you need help with your money now and potentially for the future will help you find the right advisor.

Red Flag: The advisor only provides one service.

Financial Essentials for Young Families

Ask a Financial Advisor: What is Your Investment Philosophy and Management Style?

The investment philosophy and management style of the advisor is important to understand. Does the advisor manage their clients money themselves or do they utilize portfolio managers? If the advisor manages the money himself, how does he determine if he is doing well?  

If the advisor uses portfolio managers, how is their performance measured?

It’s easy for an advisor and their client to fire a portfolio manager if they are not doing a good job, but I don’t often see an advisor fire himself if his performance is not up to snuff. Also, if an advisor is managing portfolios, does he have time to meet with clients, and vice versa?

How do they plan to grow your account value? How do they determine the right amount of risk to take in their clients portfolios? Understanding the rationale behind their investment philosophy is vital to ensure their logic lines up with your goals and beliefs.

Also, make sure they can clearly explain the investment objectives of your account without jargon.

Once the account is established, ask how often do they look at your account? Do they meet with you quarterly, annually? What is covered during an annual review?

A good advisor will regularly check on your account to take advantage of market opportunities, provide recommendations and inform you about what is going on in the market and how it affects you.

Red Flag: The advisor does not have a service schedule for reviews, and no checks and balances to make sure whoever is managing your money is doing an appropriate job.

Financial Essentials for Young Families
Financial Essentials for Young Families

Ask a Financial Advisor: Where Do You Keep My Money and How Can I See It

There are many parties to financial accounts. The advisor, the investment provider and the custodian are a few. The custodian is who actually holds onto the money. The investment provider is who is providing the vehicle for you to invest in and the advisor is who is orchestrating the transaction. The custodian may be different from the investment provider.

You should ask about the capabilities you have to view your account. It’s your money, you want to be able to check the balances at a moment’s notice.

Do you use the custodians website to view account information? Most financial institutions offer their clients an app or online portal where they can view their balances and statements.

Also, who is sending the statements? The investment provider and the custodian are required to send statements. Can they be sent electronically? Inquire about the custodial and documentation procedures that prospective financial advisors have.

Red Flag: The advisor’s own company is the custodian and portfolio manager and there are no checks and balances. (To put the importance of this into perspective: Bernie Madoff was the advisor, the custodian and the portfolio manager.)

It may take some work to find the right advisor for you.

Finding the right financial advisor can be a tough decision, especially when there are so many advisors out there, using the same titles but all offering different services. If you would like to have an easy conversation to learn more about what to look for in a financial advisor, schedule a call with us. We at Greenway Wealth Advisory can help you work through the services you need most through clear communication and transparency throughout the entire process. To learn more about working with our team, reach out today to start the conversation.

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