Questions to ask a financial advisor

Choosing a financial advisor should involve a little research, but it’s worthwhile to find someone who can help you create a better future. To help in your search, here are some key questions to ask a potential advisor.

  A client asks his Edward Jones financial advisor a question about his portfolio.

Building the future you see for yourself and those you care about is a goal that’s worth the effort. But building that future can seem overwhelming without the right kind of help. Partnering with a dedicated financial advisor can give you the guidance and support you deserve throughout your journey. But if you haven't worked with a financial advisor before, the process might feel daunting.

So we’ve compiled 10 important questions you should ask a potential financial advisor, so you can feel confident in your decision.

1. How do we work together?

Between work and family commitments, it’s crucial to find someone who makes good use of your limited time. Ask about when and how they can meet with you. Do they have evening or weekend hours? If you can't or don't want to meet in person, do they have tools, like web conferences, to meet virtually? How often will they meet with you?

Besides the basic logistics of meeting with a financial advisor, it's important to see if your approach to working with someone aligns with them. Maybe you like to be very hands-on, or perhaps you like the idea of turning over the decision-making to a professional. Be sure the financial advisor you're considering supports the way you'd like to partner together.

2. What services do you provide?

Before you settle on a financial advisor, consider what you're looking for. Do you have more straightforward financial needs and goals, with perhaps retirement savings from registered plans and employer-sponsored plans? Or do you have complex financial needs that require much more comprehensive management with a team of other professionals, such as your accountant and lawyer?

Financial advisors often offer a wide range of services, including:

  • Retirement strategies
  • Trust and estate consideration
  • Tax mitigation opportunities
  • Education savings
  • Insurance protection
  • Cash flow strategies
  • Charitable giving
  • Business succession options

Some advisors work only with high-net-worth individuals. Other financial advisors cater to a wider variety of clients at different life stages and with varying needs and goals. See if they can meet your needs now and in the future as your life and finances evolve.

3. What professional experience do you have?

Beyond financial planning, many financial advisors have other career experience that could benefit you. They might be a former accountant or someone with a managerial background. Many financial advisors are former military members or teachers, which may fit well with you.

If they’re newer in their careers, consider that these professionals often bring a great deal of enthusiasm and dedication to their work. Also consider if they’re backed by the resources of an established firm, which can be a win for both of you.

Many financial advisors pursue professional industry certifications to help them best serve their clients. At a minimum, a financial advisor must meet the requirements to sell securities. You can easily verify this by using the financial industry's IIROC Advisor report www.iiroc.ca

4. What's your investment philosophy?

A strong financial advisor will take the time to learn about you, and all the people and things that matter most to you. It’s important for them to fully understand your unique financial picture and why you’re investing. So they’ll ask detailed questions about your goals, your current financial position and where you want to be long term. It’s only after these conversations that they should start recommending strategies or products.

Find out if your financial advisor favors one style of investing or a particular type of investment. Certain styles and investments may be well-suited for some investors, but inappropriate for others. If you believe a financial advisor has a one-size-fits-all approach, you may want to look elsewhere. 

At Edward Jones, we’re guided by our investment philosophy, which focuses on a long-term approach with quality investments in a properly diversified portfolio. And our financial advisors take the time to get to know you, so they can create personalized investment strategies. We live by these principles every day, and always act in your best interest.

5. How are you paid?

Financial advisors use a variety of fee structures. Ask what approach they use – a percentage of the assets managed, a flat fee, transaction fees, an hourly rate or a combination of approaches. A good financial advisor will be candid about how they’re compensated.

6. How will you track my investment performance?

Ask your financial advisor what success looks like when it comes to your specific financial goals. The answer will help you learn what they value. Then consider if their values align with yours.

In your day-to-day life, your financial advisor should be tracking your investment performance according to how it works toward achieving your long-term goals. Of course, while it's important to stay on top of market trends and periods of volatility, they should also weigh any short-term movement against your long-term strategy.

Check that your potential financial advisor understands the value of having a diversified portfolio. And make sure they'll work with you to rebalance your portfolio when you need it, so you can stay on track toward your long-term goals. Diverse portfolios help promote steady and sustainable investment growth.

7. How will you communicate with me, and how often?

Communication is key to any successful relationship. A financial advisor should be proactive. They should give you regular updates and the latest investment guidance and research. And they should periodically check in to see if your needs have changed since the last time you met.

The right amount of communication will of course vary from person to person. It's a personal preference – strike a balance that works for you. When you've decided to hire an advisor, agree on how often you’ll touch base before you commit. You should expect at least one annual meeting to review your financial picture.

8. How will you take into account my assets you aren't directly managing?

A good financial advisor knows that your net worth may not exist only in the assets invested with their firm. You could have a Group RRSP through work, or you may have some rental properties. It's important you’re transparent with them about all assets you may have and keep them updated, so they can make sure all your assets are working toward your overall goals.

9. Do you work with accountants or lawyers?

If you're a business owner or have other complex financial circumstances, or you're looking to create a strategy for your estate, chances are other professionals will need to coordinate with your financial advisor. Will the financial advisor you’re considering work with professionals already on your team? Will they provide referrals if you need these services?

10. What resources will I have when working with you?

Depending on the financial advisor, they may work independently or as part of an investment organization. This may be important to your values as an investor, especially as your financial needs become more complex over time.

You may want to see what resources your financial advisor has that could help you feel more confident, informed and in control of your financial picture. Will you have access to online tools to monitor your portfolio? Does your financial advisor have technology to meet with you if you can't meet in person? Does your financial advisor have access to up-to-date market news and financial education resources they can share with you?

  An Edward Jones financial advisor has an initial conversation with a client in an effort to understand her needs and values.

Choosing the right financial advisor for your needs and values

Every financial advisor is different, so it's important to have all your questions answered to find one that's the right fit for you. Look for an open, transparent and collaborative financial advisor who will work in your best interest and in a way that complements your financial style.

If you’re considering working with a financial advisor, you can get started with Edward Jones today. We’re a company that’s built on relationships, so our financial advisors always start by understanding what's important to you. They work with you to build personalized strategies that support you throughout your journey, so you can achieve the future you see for yourself and the ones you love.