Knowing what questions to ask a financial advisor can save you considerable amounts of time and money. The cost of hiring the wrong advisor can be very expensive. These questions will help you choose the best professional for your needs.
By: Brennan Decima CFP® . October 1st, 2025
In this article, I’m reviewing the best questions to ask your financial advisor in 2025.
Vanguard has found that hiring the right financial professional can amount to an additional 3.5% per year in returns when things like taxes, investment decisions, emotions, and expenses are factored in. This can have a tremendous impact on your retirement. Hiring the wrong advisor can have significant long term ramifications for your success.
Key Takeaways
- The Bureau of Labor Statistics reports that there are over 326,000 financial professionals in the United States. Only 103,000 of those have the Certified Financial Planner Designation. That’s over 200k individuals giving advice without the CFP designation. There are so many different titles, names, and designations, it makes it really challenging to know who you are working with and how to choose the best advisor.
- Understanding what questions to ask a financial advisor can help you evaluate different professionals and hire the best person for your situation.
- If a financial advisor is unwilling to answer these questions, it is a giant red flag.
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How to Choose a Financial Advisor
A common challenge for many retirees is determining what financial advisor is appropriate for their situation. With so many different financial professionals, how do you narrow it down? How do you make sure you have someone you can trust?
Unfortunately, there are many different titles and names, but not all of them have the same experience and oversight. There is no one title for a financial advisor.
Some common names we have come across: Financial Planner; Financial Advisor, wealth advisor, financial consultant, wealth planner, wealth planning associate, investment advisor, CFP
In order to become a doctor or an attorney and used JD or MD, there is extensive education required. That is not the case to use the title financial planner. With social media rising, there are a lot of accounts advertising financial advice, but no credentials or education backing this advice. Scary stuff.
5 Questions to Ask a Financial Advisor
While most people can articulate their financial priorities, I find that when I ask clients what questions they have for me, they respond that they aren’t even sure what to ask.
To make your life easier, here are the top 5 questions I suggest asking a financial advisor.
1. Are You a Fiduciary 100% of the times?
When I worked for a major broker dealer, I was a fiduciary and a broker. Advisors who are dually registered can switch back and forth. Do they always let you know, probably not. A fiduciary financial advisor is legally required to put your interest first. A broker is not.
A fiduciary is also prohibited from selling you a financial product in return for a bonus or commission. When I worked for a broker dealer, we had performance metrics for our bonus that were product specific.
A true Fiduciary’s compensation comes directly from the client and is transparent on the statement. If your advisor is not a fiduciary 100% of the time, it is critical to ask for a copy of their compensation statement and conflicts of interest disclosure. If they will not provide this, it is a major red flag. Think about a doctor. If the doctor is employed by a large pharmaceutical company, and receives bonuses based off what they prescribe you, would you feel 100% confident in the prescription? The same is true for finances, if pay is impacting recommendations, it is tough to put the client first at all times.
If you want your interests to be ahead of anything (and anyone) else, it’s critical to ask an advisor you’re interviewing the following question:
“Are you a fiduciary 100% of the time?”
In my experience, the large number of responses will be, “No!”
One minute, they are a fiduciary putting your interests first; the next, they sell you something that makes them more money.
When a financial advisor acts as a fiduciary 100% of the time, you don’t have to wonder how they are being compensated.
If your advisor works for a large broker dealer like Vanguard, Fidelity, or Charles Schwab, they typically are dually registered.
Vanguard was fined by the SEC for failing to disclose their advisors had financial incentives to recommend certain managed products.
Fidelity states that in their Conflicts of Interest Disclosure “It is important to understand that we will not be a fiduciary in connection with all of our interactions with you regarding your Retirement Account. Specifically, we provide non-fiduciary assistance and education regarding Retirement Accounts and this information is not intended to be individualized to your particular circumstances and should not be considered as a primary basis for your investment decisions”
Charles Schwab states in their compensation disclosure that their advisors “earn more money when you accept some of our recommendations, including recommendations to purchase products or avail yourself of services created or managed by Schwab or one of its affiliates. Therefore, we have conflicts of interest due to the financial incentive to recommend products and services where we make the most money. You should understand these conflicts because they can affect the recommendations we provide to you.”
2. What type of client do you specialize in?
It’s extremely important to ask advisors what type of clients they typically work with. You wouldn’t go to a knee surgeon to perform eye surgery.
Some example of financial advisor specializations:
- Specific professions such as business owners, doctors, or lawyers.
- Employees of a major company, like Pfizer or Johnson and Johnson.
- Age Specific, like baby boomers or Gen Z.
It’s important that the advisor you hire has the right knowledge to help with your specific situation. It’s also comforting to know they’ve successfully helped other clients who have been in your shoes.
As a bonus, consider asking how many clients they work with. When I worked for a large broker dealer, I had thousands of clients. My definition of success was efficiency, not personalization. I started my own company to be able to spend more time with clients, talk to them more frequently, and customize each plan to their specific needs.
- It will tell you how much time they can dedicate to you
- The larger the client base, the less they can customize and personalize.
- It may give you an idea of how often you will hear from them
According to studies, the average human brain can only handle 150 meaningful human relationships. How can you have a meaningful relationship with your advisor if they have hundreds or thousands of clients? Typically advisors address this by giving you a junior advisor to meet with you on an ongoing basis.
3. What Is the Total Cost to Work With You?
Just because a financial advisor is a fiduciary 100% of the time does not mean that their costs are always full transparent.
Here are some of the common costs you might pay when working with a fiduciary:
- Advice Fees. These can be annual assets under management fees, or one time planning fees.
- Transaction Fees. These are charged by Fidelity, Schwab, or other custodians when your advisor buys or sells investments in your account.
- Expense Ratio. A mutual fund will have internal expenses to manage the fund.
It’s important to note that a fiduciary financial advisor is ONLY compensated by the advice fee. And while they don’t benefit from other fees, they still have a legal responsibility to keep those costs low.
For example, let’s say one fiduciary advisor recommends that you put $100,000 in individual stocks and the other recommends $100,000 in mutual funds
Here are two side by side:
- Individual Stocks that have a dozen trades at 8 dollars a transaction fees.= 96 dollars in addition to your AUM fee.
- Average Mutual Fund Expense Ratio = 0.65% or 650 dollars in addition to your AUM fee.
That’s a difference of $554 per year!
This is why asking about all the fees you might incur is so important.
4. What Does the Planning Process Look Like?
A good financial planner is judged by their ability to solve client’s problems, not by the number of years they have been working. What is a good example of things the advisor should be able to plan for?
A Comprehensive Plan addresses
- Reducing taxes in retirement
- Creating tax-efficient retirement income
- When to take Social Security
- Lowering risk while maximizing investment returns
- Optimizing insurance
- Helping you make sure your heirs are protected
While you are asking them about the process you might also ask:
“Does your firm have a documented process for providing financial planning services and investment advice?”
This process should include how they collect your data, evaluate your situation, and make recommendations. It should also include a methodology for how their recommendations are implemented and how your account is monitored on an ongoing basis.
5. Where is my Money Held?
If there is one question to ask a financial advisor in 2025 that you do NOT want to miss, it’s this one.
It is absolutely critical to confirm that your financial advisor uses a reputable custodian to hold your accounts. We have all heard of stories of advisors running off with clients money. There are plenty of TV shows and movies of people impacted by Ponzi schemes. Your advisor should not be taking possession of your accounts!
Well-known custodians include Fidelity, Schwab, Pershing, and LPL.
When your advisor works with a trustworthy third-party custodian, they can’t disappear with your money or put it into a Ponzi Scheme. They have limited authority to manage your investments and oversee your accounts.
A reputable custodian provides investors with FDIC and SIPC insurance. The statements should come from the custodian as well as the advisor so you can verify.
Understanding the Role of a Financial Advisor
It’s really essential to understand what your financial advisor does and any limitations on the advice they can provide. Are they limited to general guidance and education, or can they make much more specific recommendations. Understanding what they are capable of and what they are not capable of can help you make a more informed decision.
What Does a Financial Advisor Do?
A financial advisor is a professional who is compensated to give financial advice. Their expertise typically includes guiding you through retirement planning, tax efficiency, investment strategies, estate planning, and insurance optimization.
Key functions:
- Retirement Accumulation and Distribution Strategies
- Investment Strategies
- Ways to reduce retirement taxes
- Estate Planning
- Insurance Reviews
Final Thoughts and Free Resources
Choosing a financial advisor can make or break your financial future.
Finding the right advisor can save you thousands in retirement.
It is important to interview your advisor to make sure they are the right fit. A good advisor welcomes these questions.
The Financial Planning Association also is a great resource to help you find the right fit.
Questions to ask a CFP® Professional
If you would like to ask us these questions and see if we are the right fit for you. You can schedule a meeting here.
