I wrote one post on the financial advisor and how to choose one early on in this blog. You can read it here

A financial Advisor is very important for your financial health. It is just like a doctor. In fact, more than a doctor, as we go to the doctor only when our health is bad, in some eastern countries they go to their doctor for preventive medicine and check-ups also. So I realize what questions to ask them is one important subject. Frankly speaking, there are many posts on it but still, I found that there is scope for some addition. So here I come

  1. Are you a fiduciary? As explained by Investopedia

A fiduciary is a person or organization that acts on behalf of another person or persons to manage assets. Essentially, a fiduciary owes to that other entity the duties of good faith and trust.

So when you go with a fiduciary, another person is bound to some duties or answerable to some government authority. Wikipedia also mentions that “In a fiduciary relationship, one person, in a position of vulnerability, justifiably vests confidence, good faith, reliance, and trust in another whose aid, advice, or protection is sought in some matter. In such a relation good conscience requires the fiduciary to act at all times for the sole benefit and interest of the one who trusts.

2. What is your educational background?

There are a lot of individuals without an appropriate educational background working as investment advisors. Why? Because their advisor jobs at banks, brokerage firms, and insurance companies are primarily sales positions. You want to work with an investment adviser, not a salesperson. Make sure your adviser has a degree in finance, economics, or investments.

Once while talking on Twitter with some people I found that they are sufficiently big in number and affect their clients’ decisions. Yes, there are a number of individuals with other degrees who changed careers and are good advisors and really fun to talk with. However, for your investments, it might be better to hire an individual with an economics undergrad and MBA who really understands this stuff.

3. How do you get paid?

Fee-only is best. There are many ways to be paid. Ethical and unethical. The commission is another way to be paid. read about it and be clear about it. Sometimes even Agreements between professional people also do exist and I don’t have any problem with it but I will prefer if My financial advisor told me in advance. Because while doing this work a financial advisor needs legal assistance, assistance from government agencies, entrepreneurship agencies, and some other people. Getting that is not wrong but making money on behalf of it is unethical and may exploit his clients.

4. what are my all-in costs?

Not all costs are included in the fee an advisor charges for his or her services. Advisors may charge additional fees for services that are more complex or that they consider to be extra. For example, an advisor may create a financial plan for you, but then charge extra for implementing that plan.

5. What are your qualifications?

Choose the one financial adviser who is, in fact, aware of the risk in life and what to do in such a situation. CFA and CFPs are better as they are having knowledge about it in detail and they can answer each and every one of your questions. We don’t go to the financial advisor only for investment.

6. How will our relationship work?

In simple words, How can I contact you? Whether you will send me a message by email or WhatsApp or Twitter or Facebook or anything else. What will be the frequency? is it possible for me to contact you in between if something happened to the market or in my life?

7. Any disclosure?

Any action was taken against you or your company by regulations? any other record related to crime? there are many. it is better to ask. It’s important to know whether an advisor or their firm has previously violated rules or misled consumers. A number of similar complaints filed against an advisor or firm’s track record may raise a red flag.

8. What is your Investment philosophy?

There are different types of investment philosophies like Growth investing and value investing. Some advisors personalize it, others took help from Robo advisors. There are many more. This shows how the financial advisor is thinking. What are his targets and what goals he is thinking and many more? Here asking questions may make more questions to ask and help you to understand the services you will get from him.

9. What service do you offer?

Before choosing a financial advisor, it’s important to consider whether you simply want investment management or if you want more comprehensive financial planning and wealth management services. Financial advisors often offer a wide range of services in addition to portfolio management, like pension planning, tax planning, and succession planning for business families. It is better to ask.

10. What Types of Clients Do You Specialize In Serving?

Some financial advisors work exclusively with wealthy individuals and their families. Others may work specifically with business owners or people in certain professional fields, such as doctors or university employees. Choosing an advisor who works with clients whose situations are similar to yours means they’ll be better equipped to offer the type of guidance and advice you need.

11. Do you have a set account minimum?

This is more or less similar to the subquestion for the above question but it is always better to ask.

12. Experience with working financial advisers.

Higher the experience the better. But also check with whom the experience he has. Financial advisers for pensions and specialized in other things may not look very different but that may make a difference. Advisers for institutions may be different than retail clients

13. What would happen to me if you stopped working?

This a very important question to ask as the whole risk about your financial health is on the decision taken by your financial adviser. If he stopped working due to some reason pls ask him to keep some written documents.

14. Does the company you work for sell investment funds/products?

Not at all wrong. But if this is going to make a conflict of interest, then it is advisable to ask for them. If he makes an income from it then there is a possibility to push them and force his clients. I kept that as a completely different question.

15. Who is a custodian?

The history of the company and its consumer policy and how the fact they act on it also make a difference.

16. Investment benchmark in the use.

There are different benchmarks available and choosing one is important. When your portfolio is dominated by equity and paying dividends, it is good to use the total return index. But if he is using the Government Yield benchmark or money market yield as a benchmark then it will always show outperformance.

17. Will you be the only one working with me?

Some financial planners work with their clients directly, and others have a team of people that work with them. Ask who will handle your account, meet them and ask whether the planner works with professionals outside their own practice, such as attorneys, insurance agents, or tax specialists. If yes, get a list of their names to check on their backgrounds.

18. What are the conflicts of interest?

Ask the planner to provide you with a description of his conflicts of interest in writing. For example, financial planners who sell insurance policies, securities, or mutual funds may have a business relationship with the companies that provide these financial products. CFP® professionals agree to abide by a strict code of professional conduct and have an ethical obligation to put their interests first when delivering financial planning advice and services.