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
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."
-
A Financial Checklist for Your College-Bound Kids
Is your child heading off to college this fall? If so, make sure they're prepared and protected in these four key areas.
-
Why Homeowners Should Beware of Tangled Titles
If you're planning to pass down property to your heirs, a 'tangled title' can complicate things. The good news is it can be avoided. Here's how.
-
Why Homeowners Should Beware of Tangled Titles
If you're planning to pass down property to your heirs, a 'tangled title' can complicate things. The good news is it can be avoided. Here's how.
-
A Cautionary Tale: Why Older Adults Should Think Twice About Being Landlords
Becoming a landlord late in life can be a risky venture because of potential health issues, cognitive challenges and susceptibility to financial exploitation.
-
Home Equity Evolution: A Fresh Approach to Funding Life's Biggest Needs
Homeowners leverage their home equity through various strategies, such as HELOCs or reverse mortgages. A newer option: Shared equity models. How do those work, and what are the pros and cons?
-
Eight Tips From a Financial Caddie: How to Keep Your Retirement on the Fairway
Think of your financial adviser as a golf caddie — giving you the advice you need to nail the retirement course, avoiding financial bunkers and bogeys.
-
Just Sold Your Business? Avoid These Five Hasty Moves
If you've exited your business, financial advice is likely to be flooding in from all quarters. But wait until the dust settles before making any big moves.
-
You Were Planning to Retire This Year: Should You Go Ahead?
If the economic climate is making you doubt whether you should retire this year, these three questions will help you make up your mind.
-
Are You Owed Money Thanks to the SSFA? You Might Need to Do Something to Get It
The Social Security Fairness Act removed restrictions on benefits for people with government pensions. If you're one of them, don't leave money on the table. Here's how you can be proactive in claiming what you're due.
-
From Wills to Wishes: An Expert Guide to Your Estate Planning Playbook
Consider supplementing your traditional legal documents with this essential road map to guide your loved ones through the emotional and logistical details that will follow your loss.