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Questions To Ask When Choosing An Adviser

Updated: Nov 17, 2022

Finding an adviser is not always easy. Many people tend to take advice from those that are closest to them because it’s easy and they trust those people. This can have some benefits, but it can cause some damage, if the person giving advice isn’t an expert in what they’re talking about. The problem is even worse when you consider financial advisers who also aren’t very knowledgeable or good at their jobs. Afterall, why would you want to pay someone that can’t even really help you.

So if someone chooses to work with an adviser, they are in a tricky spot because they want help, but they may not really know what to ask or how to determine if an adviser is brilliant beyond belief or... not so much.

Here's a list of 9 questions that we think are helpful for scouting and testing an adviser to see if they are a good match for you:

  1. Are you a fiduciary?

    1. The answer here should be “yes”. If not, keep looking. If the adviser doesn’t know or can’t tell you what body oversees their fiduciary duty, that’s also a fail. Helpful hint: just being an ‘adviser’ does not automatically qualify someone as a fiduciary.

  2. How much do I pay you, and how much do you get paid?

    1. This sounds like the same question – it isn’t! Commissions can influence advisers and is considered compensation, even though the client doesn’t pay it directly. Ideally, the answer from the adviser is the same for both of those.

  3. What is your value?

    1. Answers will vary. Only you can determine if what they say resonates with you.

  4. How will you keep me from being my own worst enemy?

    1. Answers will vary. Just like #3, only you can determine if what they say resonates with you. This has more to do with behaviour because an investors' behaviour will determine their relationship with money and how well they can build wealth over time. A good adviser helps investors make smart choices, and avoid overreacting to bad news.

  5. What are your credentials?

    1. Ideally, they can tell you they have done more than the minimum level 5 qualification. Hopefully they can tell you that they have gone above and beyond the lowest requirement, because they want to learn how to help their clients more.

  6. What is your investment philosophy?

    1. This should be clear, but it might not be short. Here at Irvine Wenborn, we have 10 principles we believe in. If an adviser gives an answer that is something like "we pick the best investments" then more explaining is required.

  7. Tell me about your conflicts of interest?

    1. Hint: all advisers have conflicts of interest. In fact, anyone dealing with money has conflicts (think of a salesperson trying to get you to buy something that you don't need… that’s a conflict). Despite that, an adviser should be up front about getting paid, and also be able to articulate any other conflicts of interests. The more conflicts, the bigger potential problem there is.

  8. What complaints have been lodged against you and why? What were the outcomes?

    1. This speaks for itself. If an adviser has a long list of poor interactions with previous clients, move along.

  9. What is your succession plan?

    1. If an adviser can’t tell you what happens if they die or retire, can you feel good about which direction your money is headed? Helping clients with estate planning is important, so your adviser should walk the walk, not just talk the talk.

This is not an exhaustive list, but it's a very good start. If there are other concerns you have, you ought to voice them. One very beneficial question that should follow each of these questions is, "why?" Asking an adviser "why" is a great way to assess how deep they truly understand their craft. It's likely the greatest question available to anyone.

Lastly, there are some incredible advisers that understand numbers better than anyone else, but sometimes they just can't connect with their clients and we feel that because you could be working with an adviser for multiple decades, your adviser should be someone that you like. If you don't, it might be time to shop around and find someone that 'gets you'.

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