Despite our industry's best efforts to protect investors from scams and bad recommendations, good people are being taken advantage of every day by shady financial advisors. On this episode, I’m going to address the 10 questions you need to ask any financial advisor you want to hire or are currently working with and give you my answers so that you stay protected from financial predators. 

You will want to hear this episode if you are interested in...

• Are you a fiduciary and a fee-only firm? [1:51]
• Do you have any disclosures or complaints? [5:00]
• Do you have any specific certifications? [5:34]
• Do you have any specialties and what services do you offer? [7:41]
• How are you compensated for your services? [8:33]
• What other charges will I potentially incur? [9:22]
• What’s your investment philosophy? [10:54]
• Where do you keep your client’s money and how can they see it? [11:51]
• How often will we communicate? [13:40]
• How many clients do you advise and how long has your oldest client been with you? [14:40]

Integrity first

One of the most important questions you can ask a potential financial advisor is if they are a fiduciary. This means that as an advisor, they are required to put their client’s interests ahead of their own at all times. Unfortunately, non-fiduciary advisors make recommendations to their clients that solely benefit them every single day. It’s extremely important to verify that any potential or current financial advisor is a fiduciary because they will be legally and ethically bound to handle your money responsibly.

The second and equally important question you should ask a financial advisor you’re looking to hire is if they are a fee-only advisor working for a fee-only firm. This means neither the firm nor the advisor accepts commissions for recommendations they make or for managing their client’s portfolios. However, some fiduciary advisors maintain insurance and brokerage licenses that allow them to receive commissions for the recommendations that they make. I believe this creates an unhealthy conflict of interest and that being a fee-only advisor is the way to go.

Specialties, services, and security

Another great piece of information to know about a potential financial advisor is if they have any specialties and what services they offer. You want to select a financial advisor whose expertise matches your needs. If you’re hoping to start a small business you don’t want to go with someone who specializes in people going through a divorce. My specialty is retirement planning. I help people within five years of retirement through comprehensive financial planning and wealth management services. The right financial advisor is the one that matches your goal.

Finally, you need to know where your financial advisor keeps their client’s money and how you can see it. Bernie Madoff ripped off so many people because he was personally holding their investments in an account with unrestricted access. I urge all investors not to allow their advisor or their advisory firm to hold their investments directly. Rather, their investment should be held by an independent third party known as a custodian like TD Ameritrade or Charles Schwabb. Never personally write a check to your financial advisor. Any fees for services should be made out to the firm itself. Listen to this episode for more insights on hiring a financial advisor!

Resources Mentioned

• Retire With Ryan Podcast 2022 Listener Survey
• Top 10 Interview Questions When Hiring a Financial Advisor (Blog)
• Investment Adviser Public Disclosure Website
• BrokerCheck
• CFP Board

Connect With Morrissey Wealth Management 

www.MorrisseyWealthManagement.com/contact