Questions to ask a fee-only financial adviser before you hire them
Fees, fiduciary duty, services, minimums, custody and conflicts — what to ask and what the answers should sound like.
Interviewing two or three advisers is normal, and good advisers expect it. Use these questions in a first meeting, and compare the answers against each firm's Form CRS and Form ADV Part 2A brochure, which are available from the SEC's IAPD site.
How you are paid
- “How exactly will I pay you, and how much in dollars per year?” Ask for a figure, not just a percentage. As an illustration, a fee of 1% a year on a $500,000 portfolio is $5,000 a year.
- “Is your fee negotiable? Does it fall as my assets grow?” Many asset-based fee schedules are tiered.
- “What other costs will I pay?” Fund expense ratios, trading and custody fees are separate from the adviser's fee.
- “Do you, your firm or any affiliate earn commissions, 12b-1 fees, referral fees or revenue sharing on anything you recommend?” A fee-only adviser should answer no. See what fee-only means.
Standard of care
- “Are you acting as a fiduciary for all of my accounts, at all times?” Registered investment advisers owe clients a fiduciary duty under federal law. A dually registered professional may act as a broker for some accounts, where a different standard (Regulation Best Interest) applies.
- “Will you put that in writing?”
Services and fit
- “What do I get for the fee?” Investment management only, or financial planning too — tax, retirement income, insurance review, estate coordination?
- “Who are your typical clients?” An adviser who mostly serves retirees may not be the best fit for a young family, and vice versa. Form ADV Item 5.D shows the firm's client types.
- “Do you have an account minimum or minimum fee?” This is disclosed in the brochure's types-of-clients section.
- “Can I pay just for a plan or hourly advice, without you managing my money?” Many firms offer hourly or flat-fee planning; our hourly and flat-fee pages list firms that report those fee types.
Who holds the money
- “Who is the custodian for my accounts?” Normally an independent bank or brokerage. You should receive statements directly from it.
- “Will you have discretion to trade without asking me first?”
People and continuity
- “Who will I actually work with, and how often will we meet?”
- “What credentials and experience does that person have?” Ask for the Form ADV Part 2B brochure supplement for that person, and look them up on BrokerCheck and IAPD.
- “What happens to my account if you retire or the firm is sold?”
Record
- “Have you or your firm ever been the subject of a complaint, regulatory action or arbitration?” Compare the answer with the disclosures on IAPD and BrokerCheck.
What good answers sound like
Good answers are specific, consistent with the written disclosures, and unhurried. Be cautious if an adviser can't state their total fee in dollars, is vague about how affiliates are paid, promises returns, or pressures you to move money quickly. Take notes in each meeting so you can compare firms like for like afterwards.
This site lists firms that report no commissions on Form ADV, alphabetically; we do not rate or recommend advisers. Use the list to find candidates and the questions above to choose.