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Published on: 01/04/2024 • 8 min read

10 Questions to Ask a Financial Advisor at Your Initial Consult

As a high-net-worth individual or business owner, making informed financial decisions is essential in order to help safeguard your wealth and put it in a position to experience growth. For most, that means partnering with a financial advisor who can help them make smart decisions by offering personalized guidance and expertise. 

Before you make a commitment to work with a local financial advisor, it’s important to have an in-depth initial consultation, during which you can ask essential questions and get a feel for their approach, experience, and services.

So, what are good questions to ask a financial advisor? Here are some key areas to cover during your initial consultation. 

1. What is your experience and qualifications?

Understanding a financial advisor’s experience and qualifications isn’t just about checking boxes. It’s about verifying that they have the necessary expertise to help guide your financial decisions, protect your wealth, and help it grow. 

The length and breadth of their experience can give you a snapshot of their knowledge and proficiency in handling different financial scenarios and market conditions. It can also indicate how well they understand the unique financial needs and goals of high-net-worth individuals or businesses like yours.

When discussing qualifications, ask about their credentials. Advisors with designations such as Certified Financial Planner (CFP), Chartered Financial Analyst (CFA), or Certified Public Accountant (CPA) have undergone rigorous exams and have met strict ethical and professional standards, meaning they are likely well-equipped to handle complex financial matters.

2. Can you provide references or client testimonials?

A reputable financial advisor should have no problem providing references or client testimonials for you to review. This will give you a better idea of their track record and level of satisfaction from past clients. You may also reach out to these references directly to ask about their experience working with the advisor.

3. What is your investment approach?

Each financial advisor may have a different investment approach that they use to build and manage portfolios; do they include many alternative investment strategies? Rebalance regularly and remain conservative? 

Some advisors may focus on long-term, conservative investments while others may take a more aggressive approach. It’s important to find an advisor whose investment style matches your preferences and comfort level while helping you take that additional step to level up your wealth management strategy.

While understanding their philosophy can help you determine if it aligns with your goals and risk tolerance, they should be able to provide you with solutions that fit your financial life, not their philosophy. 

4. Can you explain your fee structure?

Understanding how a financial advisor is compensated is crucial in order to avoid any conflicts of interest and ensure transparency. Some advisors may charge a flat fee, while others may work on commission or a percentage of your assets under management (AUM).

Additionally, it’s important to ask about any potential hidden fees or charges that may come up throughout the course of your relationship with the advisor. Make sure you have a clear understanding of how much you will be paying for their services and what exactly those services entail.

5. How often do you communicate with clients?

Communication is key when it comes to working with a financial advisor. You want someone who will keep you informed about your investments as well as any changes in the market, and be available to address any concerns or questions you may have.

Ask the advisor how often they typically communicate with their clients and what their preferred method of communication is. Some advisors may prefer to schedule regular in-person meetings, while others may rely more on phone calls or email updates. Make sure their communication style aligns with your preferences.

Like many questions to ask a potential financial advisor, you can get more out of it by going a bit deeper. You can also ask about their client-to-advisor ratio, which can give you an idea of how many clients they are currently servicing and how much individual attention they are able to provide.

6. What services do you offer?

Financial advisors may have different areas of expertise and offer a range of services. Some may specialize in retirement planning, while others may focus on estate planning or tax strategies. Then you have the wealth management firms that offer a boutique family office experience and can therefore offer access to a diverse suite of financial services and professionals.

It’s important to understand the extent of services offered by a financial advisor and whether they align with your needs. This will also give you an idea of what additional resources or professionals may be available to support you in managing your wealth.

7. What is your approach to risk management?

Because there is such a strong connection between health and wealth management, understanding your potential financial advisor’s approach to risk management can help lower those stress levels, and is an essential aspect of your initial consultation. 

Different advisors may have different strategies for mitigating investment risk, which can significantly impact the performance of your portfolio. Thus, it’s crucial to ask about their risk management philosophy and the specific tactics they employ to safeguard your assets. 

This could encompass diversification strategies, the use of insurance, or even the incorporation of alternative investments to hedge against market volatility. Not only does their answer speak to their ability to help you protect your wealth during market downturns, but it also provides insight into their overall investment philosophy and whether it aligns with your financial goals and risk tolerance.

While this may seem like an unimportant thing to ask a financial advisor, because the financial industry is constantly evolving, it’s important for a financial advisor to stay current on industry changes and trends. Ask the advisor how they stay informed about market updates, changes in legislation, tax laws, and new investment opportunities.

Some advisors may attend conferences or seminars, while others may rely on in-house research teams. It’s also important to ask how this information is then shared with clients and if it influences their investment decisions.

Having a financial advisor who stays proactive and informed can be crucial in helping you make sound financial decisions while helping you to adapt your strategy to market changes.

9. Can you help me effectively manage my entire financial landscape?

When planning questions to ask a financial planner, don’t be afraid to ask questions specific to your financial situation, such as: 

  • Is my 401(k) invested properly?
  • Am I saving enough money?
  • Am I spending enough?
  • I’m dealing with my parent’s estate. Can you help me?

These types of questions can help you understand if your current financial habits are serving you well and if there are any areas that may need improvement or adjustment. Additionally, it will give you a better idea of the approach an advisor may take in helping you manage your financial well-being. 

10. How do you help clients plan for major life events?

Life is full of unexpected events, and it’s important to have a financial plan in place to prepare for them. Ask the potential advisor how they incorporate major life events such as marriage, divorce, having children, buying a home, or retirement into their overall financial planning strategy.

A good advisor should be able to provide guidance on how to financially prepare for these significant life changes and adjust your plan accordingly. They should also be able to assist you in analyzing the potential impact of these events on your financial goals and help you make necessary adjustments. 

How do I prepare for my first meeting with a financial advisor?

While considering what to ask a financial advisor at your initial consultation, it’s also important to consider what they could ask you. Be prepared to discuss your current financial situation, including income, expenses, assets, debts, and any existing investments or retirement accounts.

The advisor may also ask about your long-term financial goals and your risk tolerance. It can be helpful to bring along any relevant documents such as:

  • Your most recent tax returns
  • Investment and bank account statements
  • Insurance policies
  • Will and estate planning documents
  • Debts (including mortgages, student loan debt, credit card debt, etc.)

This can help give the potential advisor a better understanding of your financial situation, provide more personalized recommendations, and determine how good of a fit they will be for you. 

Learn more about potential warning signs of a bad financial advisor.

Simplify your life and secure your wealth with the help of Avidian Wealth Solutions

At Avidian Wealth Solutions, our experienced financial advisors are dedicated to helping you work to simplify your financial life and achieve long-term wealth security. As your financial partner, we aim to make sure that you know what to expect at your initial consultation with us. and hope that you feel prepared with these questions to ask a financial advisor.

We offer a range of services including investment management, retirement planning, estate planning, risk management, tax strategies, and wealth management in Houston, Austin, Sugar Land, and The Woodlands. Our team stays informed on industry changes and trends to make sure that our client’s portfolios are well-positioned for long-term success.

Whether you’re just starting your financial journey or looking to make adjustments to your current plan, our team at Avidian is here to help you every step of the way. Schedule a consultation with us today to learn more!

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