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3 Questions You Should Be Asking Your Financial Advisor


Like many other facets of your life, your financial situation will likely change over time. Careers progress, circumstances change, and estates grow over time.

As your financial situation changes, it’s a good idea to periodically reevaluate if your current financial advisor is still a good fit. Different individuals, firms, and divisions will have different strengths, weaknesses, areas of expertise, and even amounts of time they can devote to your individual needs.  

With that in mind, we put together a few things you should think about when it comes to your relationship with your current financial advisor.

Do they have a succession plan?  

Especially true if you work with a smaller firm, you might run into the danger of not thinking about this one until it happens. If something happens to your advisor, who takes over? Will the transition be as seamless as possible? It’s important to know, as the alternative of scrambling to find a new home for your wealth management needs can be extremely stressful.

Are they looking at the big picture?

Is your advisor well-synced with your full financial picture and your long-term goals?  Sometimes, especially early in a career, you might have an advisor that’s part of a larger organization or is simply focused on generating returns. But as your career grows, your financial life becomes more complex, and your long-term dreams and goals solidify, it might be worthwhile to consider whether your advisor is considering things from the same perspective as you are.

Ask if your advisor is looking at more than just your investments.  What about your company plan, your current expenses, your estate docs, your current insurance, and your tax expenditures? If your advisor isn’t looking at those things, you could probably be doing better for yourself.

Is your financial advisor a fiduciary?

While not a widely used word in common parlance, knowing whether or not your advisor is a fiduciary is probably one of the single most important variables to consider in choosing financial management. A fiduciary, simply put, is someone legally obligated to act in the client’s (i.e. your) best interest, not their own. This one is all about transparency and incentive structure, because non-fiduciaries are also looking to maximize how your money works for them. Fiduciaries can’t and won’t do things like that. We strongly recommend people only work with fiduciaries.

Is your financial advisor fee-only?

This one targets how your advisor gets compensated. Fee-only is the most transparent and simple form of compensation, wherein the advisor merely charges you a percentage of assets under management (AUM) for your business, or a flat annual fee, for example. Like fiduciary status, this ensures a beneficial incentive structure. If your advisor is getting compensated some other way, like commissions from the sale of certain financial products, you may want to reconsider. 

Is it time for a second opinion?

This one you should ask yourself, probably on an ongoing basis as life marches on and your financial life evolves. If you’ve got any red flags about your current advisor, or anything is unclear for any of the above questions, it can’t hurt to get a second opinion.

Planning Capital Management Corp is a Registered Investment Advisor with the SEC, and we are held to a fiduciary standard with all of our clients. We offer full financial planning in conjunction with investment advice and portfolio management. Should you have any questions or concerns about current market conditions, or just general financial planning questions, schedule a call with us!