You, the client, have the right to ask any questions you feel are appropriate to help you select the right advisor. If you’re trying to figure out whether an advisor is worth your hard-earned dollars, be sure to ask the following questions:
How and how much are you paid? Advisors are required to tell you how they’re paid but not how much. If an advisor quotes her compensation as a percentage, ask her to convert that compensation into dollars and get it in writing. Don’t settle for the common brush-off response, “I’m paid by the company.” The advisor doesn’t get paid by the company if she doesn’t sell you some sort of an insurance or investment product. And if the advisor can’t or won’t tell you how much she’ll be compensated if you work with her, she’s definitely getting paid commissions and likely doesn’t want to tell you how much.
Are you a fiduciary? A fiduciary has a legal responsibility to put her client’s interest above all others. If you’re seeking professional, objective financial advice, don’t settle for anything less than a fiduciary.
Starting with these questions saves you a lot of time because asking them eliminates the overwhelming majority of advisors. Now you can concentrate your search for an advisor based on her qualifications, experience, and expertise.