The best questions to ask a financial advisor before hiring cover four things: how they are paid, whether they act as a fiduciary at all times, what services you actually receive, and who you will work with day to day. Ask all twelve below in your first meeting. A good financial advisor in Chattanooga, TN will answer each one plainly and in writing.
Hiring an advisor is a long-term relationship. Switching later means moving accounts, re-explaining your situation and sometimes realizing gains you did not plan to realize. Most of the problems people run into with advisors, such as surprise fees, product-driven recommendations or an advisor who disappears after the sale, can be spotted in the first conversation if you know what to ask.
1. How are you paid, in total? Ask for every source of compensation: advisory fees, commissions, 12b-1 fees, revenue sharing and referral fees. A fee-only advisor is paid only by clients.
2. Are you a fiduciary 100% of the time, for every account? Some advisors act as fiduciaries for advisory accounts but as salespeople for insurance or brokerage products. Ask for the commitment in writing.
3. Do you or your firm receive anything for recommending a product? This includes trips, bonuses and payments from fund companies.
4. Can I see your Form ADV Part 2? Every registered investment adviser files this disclosure brochure with the SEC or state. It explains fees, services and conflicts in plain language.
5. What exactly is included? Investment management only, or tax planning, retirement income, insurance review, estate coordination and education planning too?
6. What does your planning process look like? You want a defined sequence: discovery, analysis, written recommendations, implementation and ongoing review.
7. How often will we meet, and who initiates? Ask how life changes such as a job change, an inheritance or a health event are handled between scheduled reviews.
8. Who holds my money? Your assets should sit with an independent custodian in your name, not with the advisor.
9. What credentials do you hold, and can I verify them? The CFP Board, FINRA BrokerCheck and the SEC's Investment Adviser Public Disclosure site let you verify credentials and any disciplinary history.
10. Who are your typical clients? An advisor who works mostly with retirees plans differently from one who works mostly with young professionals.
11. Who will I work with day to day? Find out whether you will meet with the planner who builds your plan or be handed to a junior team member.
12. What happens if I want to leave? Ask about termination terms and any exit fees. A client-first firm makes leaving simple.
If any of these show up, keep interviewing. Integra Wealth is an independent, fee-only registered investment adviser in Chattanooga with no broker-dealer affiliation, and every one of these questions is welcome in our first conversation.
Interview at least two firms. Write down each answer, then compare total annual cost in dollars rather than percentages, the services included for that cost, and how each advisor explained your situation back to you. The advisor who asked the most questions about your goals before offering ideas is usually the one who will plan rather than sell.
Also compare the paperwork. A fiduciary firm will hand you an advisory agreement and Form ADV Part 2. A sales-based relationship often starts with an application for a product.
You should leave with a clear picture of how the firm works, what it costs and what happens next, without having been asked to sign anything. You should also feel that the advisor understood what matters to you: retiring on your timeline, supporting family, building a business or giving back.
How you are paid. Compensation drives incentives, so knowing whether an advisor is fee-only, fee-based or commission-based tells you which conflicts to watch for.
Use FINRA BrokerCheck, the SEC's Investment Adviser Public Disclosure site and, for CFP® professionals, the CFP Board's verification tool. Each shows registrations and any disciplinary history.
Many independent advisors offer a complimentary first conversation so both sides can decide whether the relationship is a good fit before any fee applies.
Ready to put these questions to work? Schedule a free consultation with our financial advisor in Chattanooga, TN and ask us all twelve.
This article is for educational purposes only and is not individualized investment, tax or legal advice. Talk with a qualified professional about your specific situation.
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