12 Questions to Ask a Financial Advisor Before You Trust Them

A polished title and a friendly meeting can make almost any offer feel safe. The written answers tell you what you are actually buying.

Before you hire a financial advisor, get clear answers to 12 questions. Ask about the total cost, how the person gets paid, what could go wrong, and what help you get later.

A commission does not make advice bad. A fee does not make it good. You need the full answer in writing.

12 questions to ask a financial advisor

Take this list to your first meeting.

1. What will you do for me?

Ask the person to name the service. Is it a one-time plan, ongoing advice, help buying investments through a broker, an insurance sale, or something else?

The title "financial advisor" does not answer this. The same person may work in more than one role.

2. What will I pay in the first year?

Ask for one dollar estimate. It should include:

planning or advice fees;

sales commissions;

account fees;

fund or product costs; and

any cost to leave.

"No fee" can mean there is no separate bill. The cost may still come out of your account or the product.

3. How do you and your firm get paid?

Ask about salary, bonuses, commissions, a yearly percent of your money, flat fees, and payments from other companies.

You are not looking for a magic payment method. You are looking for an honest answer.

4. Do you make more if I choose this?

Some products pay the person or firm more than others. Some firms also favor their own products.

Ask: "Would you or your firm earn less if I picked another reasonable option?"

5. What cheaper or simpler choices did you compare?

Ask to see the other choices, including keeping what you have or doing nothing yet.

The answer should explain why the recommended choice fits you better. It should not compare a costly product with one bad option.

This matters most with permanent life insurance. If you are being pitched whole life, an IUL, or "infinite banking", read those guides and term versus whole life before you sign.

6. How can this lose money or fail?

Ask about the real downside. Can the value fall? Is any promise guaranteed, and who backs it? What facts would make the choice stop fitting your goal?

If the answer is only about past gains, ask again.

7. What happens if I need my money early?

Ask about lockups, sale limits, taxes to check, and charges for leaving.

"Liquid" means you can get your money out. Ask how long that takes and what it may cost.

8. What will you do after I sign?

Ask what the person will review, how often you will hear from them, and what costs extra.

A yearly fee does not always mean a yearly plan update. Get the service in writing.

9. Are you a fiduciary for this choice?

A fiduciary has a legal duty to put the client's interest first within the part of the relationship covered by that duty.

Ask when the duty applies, when it does not, and whether the person will state the answer in writing. The word alone is not enough.

10. What is your legal name and license?

Get the person's full legal name, firm, role, license or registration type, and ID number. You need these details to search official records.

11. Have you had complaints or discipline?

Ask the person, then check for yourself. A record needs context, but you should not learn about it after sending money.

12. Who holds my money?

Ask for the name of the bank, brokerage, or insurance company that holds the assets. Ask where statements will come from and whom to call if something looks wrong.

How financial advisors get paid

Source: SEC Investor Bulletin fee example; it assumes $100,000 grows 4% a year for 20 years and does not predict future returns.

Pay can affect what a person has reason to recommend.

Payment method | What it means | Ask this
Commission | The person or firm is paid when a product or trade is sold | Would another choice pay you less?
Asset fee | You pay a percent of the money in the account each year | Which money is charged, and what service is included?
Flat or hourly fee | You pay a set price or for time used | What is included, and what costs extra?
Salary or bonus | The firm pays the person | Is the bonus tied to sales, products, or new money?
Third-party payment | Another company pays the firm | Does that payment limit the choices I see?

The SEC says commissions, asset fees, bonuses, third-party payments, and sales of a firm's own products can create conflicts. A conflict is not proof of wrongdoing. It is a reason to ask how this choice affects the person's pay.

Read the SEC staff bulletin on conflicts of interest for more detail. FINRA's fees and commissions guide explains common costs.

Ask for the cost in dollars

Percentages are easy to ignore.

If someone says the fee is 1% a year, ask what that would cost on your account today. Then ask how the number changes if the account grows.

Also ask about costs inside the investment. A fund can charge its own fee on top of the advisor's fee.

Investor.gov suggests a direct question: if you invest $10,000, how much goes to fees and how much is invested? Its conversation starters include this and other useful questions.

Is my financial advisor ripping me off?

The honest answer usually depends on the total cost and the conflicts, not on any single fee.

Add up what you pay each year. Include the advisor fee and the fund costs inside your account. Then ask whether a cheaper or simpler option would do the same job. As the fee example above shows, a 1% yearly fee can quietly cost tens of thousands of dollars over the years.

That is not proof of fraud. It is a reason to ask hard questions and get the answers in writing.

Check the advisor before you send money

Do not rely on a title, award, or letters after a name.

For U.S. investment work:

Start with Investor.gov's Ask and Check tool.

Use FINRA BrokerCheck for brokers and brokerage firms.

Use Investment Adviser Public Disclosure for investment adviser firms and many adviser representatives.

Search both the person and the firm.

BrokerCheck can show work history, registrations, and certain customer disputes or disciplinary events. Read the details, status, and result. A listed event is not always proof that the person did something wrong.

For insurance, use your state insurance department. The NAIC directory links to each state.

FINRA warns that professional labels vary in how hard they are to earn. Its guide to financial designations explains why a title should not be your only check.

Read these two short documents

Ask for Form CRS. This is a short customer relationship summary. For firms covered by the rule, it explains services, costs, conflicts, duties, and certain legal or disciplinary history.

Investor.gov has a plain Form CRS guide.

If you are hiring an investment adviser, also ask for Form ADV Part 2. This is the firm's longer brochure. It explains the business, services, fees, conflicts, and certain discipline.

These forms do not cover every person who uses a financial title. An insurance agent, tax preparer, lawyer, or financial coach may have different licenses and papers.

Compare two offers on one page

Put each offer into the same table:

Compare | Offer A | Offer B
What I get | |
First-year cost in dollars | |
Ongoing yearly cost | |
Cost or limit if I leave | |
How the person and firm get paid | |
Main risk | |
Cheaper or simpler choice | |
Help after I sign | |
Who holds the money | |

Use the written contract, fee sheet, prospectus, or policy. A prospectus is the official document that explains an investment's costs and risks.

FINRA's guide to working with an investment professional tells investors to read the papers and ask about extra pay tied to an account, service, or product.

Answers that should slow you down

Pause if:

the person will not give costs in writing;

"free" is the only cost answer;

the risks are brushed aside;

the written papers do not match the conversation;

the person will not explain how they get paid;

you are pushed to act without a real deadline; or

money must be sent to a person instead of the named firm or account holder.

One unclear answer may have a simple reason. Get the reason and updated papers before you move money.

Know what these checks cannot prove

Registration does not promise skill, honesty, or good results. A clean record does not predict the future. A disclosure does not prove guilt.

Rules also depend on the service and account. For example, the U.S. Department of Labor says its 2024 retirement advice rule was vacated by a court in 2026. Old articles about that rule may now be wrong.

This guide is general education. It cannot tell you whether one advisor, product, or account is right for you.

Sources

Investor.gov, Form CRS guide; accessed 2026-07-27.

Investor.gov, Conversation Starters; accessed 2026-07-27.

Investor.gov, Ask Questions; accessed 2026-07-27.

Investor.gov, Ask and Check; accessed 2026-07-27.

Investor.gov, Investment Advisers; accessed 2026-07-27.

FINRA, About BrokerCheck; accessed 2026-07-27.

FINRA, Working With an Investment Professional; accessed 2026-07-27.

FINRA, Fees and Commissions; accessed 2026-07-27.

FINRA, 3 Things to Know About Financial Designations; accessed 2026-07-27.

SEC staff, Conflicts of Interest for Broker-Dealers and Investment Advisers; accessed 2026-07-27.

U.S. Department of Labor, Questions to Ask an Investment Advice Provider; accessed 2026-07-27.

U.S. Department of Labor, Retirement Security Rule; accessed 2026-07-27.

National Association of Insurance Commissioners, State Insurance Departments; accessed 2026-07-27.

Investor.gov, How Fees and Expenses Affect Your Investment Portfolio; accessed 2026-07-27.