Questions You Need To Ask Your Potential Financial Advisor

Finding a financial advisor can be fraught with uncertainty. You want to seem knowledgeable about your financial picture, but the whole point of finding an advisor is to take advantage of expertise you don’t have. The trick to finding a good advisor—one who will help guide you through choosing the best investment plans for you—is to ask the right questions up front.

Here are ten questions to help you on the road to building a solid relationship with an advisor you can trust and who will have your best interests at heart.

1.      Are you a fiduciary? “Fiduciary responsibility” means the advisor is required to put the needs of the client first, above and beyond any benefit they might enjoy as a representative for a particular investment or fund. Even though an RIA is not legally appointed, they are held to the legal fiduciary standard, and as such, are required to spell out any potential conflicts of interest during your initial meetings.

2.      What are your licenses, credentials, or certifications? This determines whether the advisor offers the services you desire. Do you just want investment planning help, or are you after a full retirement plan, including tax and estate planning? These answers can help you choose with whom to meet and work with in the long term.

3.      How are you compensated, including soft dollars? Soft dollars, in the RIA world, are monies and/or services provided by the custodian which may not be related to product sales. If you are not dealing with a fiduciary, the recommendations can change to be of more benefit to the broker than the client. The fees need to be transparent, and compensation can vary greatly. Make sure you know what to expect, because the idea that advisors only make money when their clients make money isn’t always the case.

4.      What types of clients do you specialize in? Sometimes advisors have a niche, and if that matches with your investment and planning needs, a stellar relationship can be born. The more aligned your advisor is with your values and interests, the stronger your plan can be to the benefit of everyone.

5.      What is your investment approach? If you’re interested in frequent buying, selling, and trading, and the advisor with whom you’re meeting is more inclined for the slow and steady approach, chances are you aren’t a good fit. Aligning yourself with someone who matches your risk threshold provides a foundation for a plan you can trust, with no nasty surprises six or twelve months down the road. Find out your investment personality with our free Financial Identity Quiz.

6.      How much contact do you have with your clients? If you’re interested in a more hands-on approach, and your advisor is expecting to meet with you once a year, you could end up feeling ignored. On the other hand, your advisor may take your more frequent phone calls as a sign you don’t trust him or her. Even if you don’t know yet how often you will need an update on your financial picture, getting guidance from your advisor at the right frequency helps you feel empowered for your future.

7.      Will I be working with you or your team? Perhaps your advisor has a team whose strengths and personalities are a good match for you, or cover more specialties than one individual by themselves. This can be good for flexibility, but knowing this up front can save frustration. Awareness of whom you’re dealing with can stave off feeling brushed aside if you’re expecting to talk to one advisor only to end up with someone else in the office.

8.      Can you explain (without breaking confidentiality) why the last two clients left your firm, and tell me about one you let go? This is a two-way street. Knowing the deal breakers can help you avoid becoming the nightmare client an expert isn’t pleased to be working with. Insight into why they lost previous business can help you understand where things sometimes just don’t work out. This is a tough question to ask, but it can teach you about what that advisor values most.

9.      How did you handle the Great Recession and the aftermath of 2008?  A lot of people pulled investments when the housing bubble popped, which contributed to the recession much like an avalanche gathers more snow as it slides ever downward. An advisor who was able to weather the storm to mitigate losses for their clients has some stories to tell, and if you give them a listen, you’ll be able to assess their reactions when things aren’t always going so well in the market.

10.  Is there anything in your regulatory record I should know about? This question is difficult to ask, but it’s absolutely necessary. There are ways to research this on your own, such as visiting the IAPD on the Securities Exchange Commission website, FINRA, and other regulatory boards, such as the CFP Board. However, gauging the answer from the advisor themselves is the best way to get a read on any red flags that are imperative to making your decision.

Your relationship with a solid, reputable advisor can become one of the strongest, most important relationships of your life. It can mean the difference between looking forward to your future or worrying about it. These questions can help ensure your portfolio—and your future—are on the upswing.


LEESA SLUDER IS A REGISTERED INVESTMENT ADVISER. INFORMATION PRESENTED IS FOR EDUCATIONAL PURPOSES ONLY AND DOES NOT INTEND TO MAKE AN OFFER OR SOLICITATION FOR THE SALE OR PURCHASE OF ANY SPECIFIC SECURITIES, INVESTMENTS, OR INVESTMENT STRATEGIES. INVESTMENTS INVOLVE RISK AND UNLESS OTHERWISE STATED, ARE NOT GUARANTEED. BE SURE TO FIRST CONSULT WITH A QUALIFIED FINANCIAL ADVISER AND/OR TAX PROFESSIONAL BEFORE IMPLEMENTING ANY STRATEGY DISCUSSED HEREIN.

Saving the Oceans, One Garbage Patch at a Time

The biggest landfill in the world isn’t actually on land.

It’s in the Pacific Ocean, floating between California and Hawaii, and it’s known as the Great Pacific Garbage Patch. Current estimates conclude it’s the size of Texas. It’s also not the only one of its kind, though it is by far the largest.

What Is a Garbage Patch?

A garbage patch in the ocean is the natural gathering point of trash and plastics where rotating currents and winds converge to create a vortex of trash, known as a gyre. Over time, the plastics break down to smaller particles, just a few millimeters. These float on or near the surface of the ocean much like oil spills, and unfortunately, evidence shows they’re entering the food chain via fish and other marine life. If unchecked, reports say the world’s oceans, by 2050, will contain more plastic than fish.

Why You Should Care About Garbage Patches

Samples by the Ocean Cleanup, spearheaded by the young Dutch engineer and CEO Boyan Slat, show plastics in the patch date as far back as 40 years. During an expedition in 2015 to gauge the size of the Great Pacific Garbage Patch, scientists measured the depth and size of the patch, and witnessed first hand plastics being eaten by marine life. If those fish are caught, they have a very real chance of being consumed by humans.

Technology and Innovation To the Rescue

The Ocean Cleanup has a different plan, however, and thanks to more than $30 million in crowdfunding and donations, they’ll use technology developed by Slat in 2013, when he was just 18, to deploy a series of arrays—a mobile drifting system made up of hard-walled, recyclable pipe with an attached screen designed to catch the plastics and trash. The arrays are not fixed to the sea floor, and they use the same currents that accumulate the trash in one place to corral it. Because the system moves with the currents and winds, it is extremely flexible to whatever the ocean can throw at it, making it more durable than vessels and nets. Vessels and nets would take thousands of years and billions of dollars to complete the cleanup.

Designed to catch debris as small as a centimeter before it can break into dangerous microplastics, and as large as discarded fishing nets tens of meters in size, Ocean Cleanup originally planned to deploy their arrays by 2020 with the promise of cleaning up 50% of the Great Pacific Garbage Patch in 10 years. On May 11, 2017, Slat announced that not only would Ocean Cleanup be able to deploy 2 years ahead of schedule in mid-2018, but that improvement to the design of the arrays meant they’d reach the 50% cleanup marker in only 5 years.

A test deployment is scheduled for late 2017, and when testing is complete, the full system will be deployed to begin its mission of cleaning up the Great Pacific Garbage Patch. Through reduction of plastics usage at the source and the innovation of Ocean Cleanup, instead of more trash than fish, we could see plastic-free oceans by 2050.

How Does Our Spending (and Investing) Reflect Our Values?

How we spend our money tells a lot about a person, to the point where corporations the world over employ fleets of people to study our spending habits. Complicated algorithms exist to predict the direction of the collective social focus through our purchase power, because that’s what it is: power. Consumers have the clout to drive social responsibility through the companies we choose to give our hard earned wages.

What product will become the next fair-trade coffee? The next hybrid or electric vehicle? Which industry is next to get an overhaul thanks to public demand for sustainably farmed, humanely raised, organically grown, responsibly manufactured products?

Is it the US egg industry, facing demand for cage-free eggs because Publix, McDonalds, and Wal-Mart—along with a host of other restaurants and grocers—have all pledged to eliminate battery farmed eggs from their shelves and menus within the next ten years? Maybe, despite what the egg industry lobbyists assert.

Our spending habits matter, driving change in the corporate world when we pledge to put our money where our beliefs are.

This is also true in our investment choices. In Audrey Choi’s Ted talk, she details how a Harvard Business School study showed that businesses focused on environmental and social issues alongside quarterly financial growth had greater returns on investment compared to businesses only focused on quarterly growth. Oxford University conducted their own research and found that the companies that cared about social and environmental responsibility had better operational efficiency, lower cost of capital, and better stock price performance.

“…the future is already here. Sustainable investment today is a $20 Trillion market, and it’s the fastest growing segment of the investment industry… It now represents 1 out of every 6 dollars under professional management in the United States.”

Sustainable business practices are becoming the norm as society demands more social responsibility to go with our consumerism. It’s no longer seen as tree-hugging, hippy, mumbo-jumbo to “vote with our dollars” for the business practices that closely mirror our values. Sure, there’s a premium to be paid if the label on a product contains the word “artisan,” but for a growing number of people, it’s worth it.

Audrey Choi says the financial impact of social responsibility has already made giants out of companies like Burt’s Bees and Ben and Jerry’s. As our conscientiousness grows, triple bottom line companies like these—who consider environmental and social issues alongside the financial impact of their business practices—are taking notice. Technology is not only making sustainable products possible, it’s making them affordable, giving the average person the leverage to spend dollars in line with values. Consumers, thanks to the Internet, are savvier than ever, and they don’t stop at researching products—they’re researching the companies behind the products. What doesn’t measure up gets bypassed.

“So why do we think that our choice of a $4 shade-grown fair trade cup of coffee in a reusable mug matters, but what we do with $4,000 in our investment account for our IRA doesn’t?”

The answer is, it does matter. Our choices have power beyond the supermarket, especially when the difference one person makes inspires others.


PETE KRULL IS A REGISTERED INVESTMENT ADVISER. INFORMATION PRESENTED IS FOR EDUCATIONAL PURPOSES ONLY AND DOES NOT INTEND TO MAKE AN OFFER OR SOLICITATION FOR THE SALE OR PURCHASE OF ANY SPECIFIC SECURITIES, INVESTMENTS, OR INVESTMENT STRATEGIES. INVESTMENTS INVOLVE RISK AND UNLESS OTHERWISE STATED, ARE NOT GUARANTEED. BE SURE TO FIRST CONSULT WITH A QUALIFIED FINANCIAL ADVISER AND/OR TAX PROFESSIONAL BEFORE IMPLEMENTING ANY STRATEGY DISCUSSED HEREIN.

Knowing When (and How) to Change Financial Advisors

You set out on your financial journey with a specific vision in mind, and you thought you had a financial advisor who would be with you the whole way. Whether the market was bull or bear, there was one person (or team) you knew had your back.

Then it hits you—after many years, suddenly you and your advisor aren’t on the same page anymore. Is it you…or them?

Perhaps your investment priorities have changed. You are now interested in investing in one industry over another, or maybe you want a different kind of fund outside your advisor’s expertise.

Oftentimes, investment strategy changes with age: in your twenties, you wanted a portfolio that is more aggressive, but a decade on, you see the value in a slow and steady approach. Or perhaps it’s a “clean and clear” change you want by divesting and reinvesting in fossil-fuel-free options. It may even be more basic: you only want to invest in green initiatives or are interested in a more socially-equitable focus.

A good financial advisor will always meet with you discuss your questions and curiosity about a new financial planning or investment management strategy. He or she may have a strong reason for maintaining a specific strategy for you, but they should clearly be able to point to how and why it will benefit you, not them.

There may be more obvious warning signs that it’s time to leave.

Perhaps you’ve seen the signs—an inability to get your investment team members on the phone, or asking questions that your advisor doesn’t seem willing to answer. Maybe you have trouble getting anything in writing, from answers about fees and account management to updates on your portfolio and how it’s performing.

Whatever the reasons, a change is in order and you have no idea now how to break up with your financial advisor.

There are a few fundamental steps you can take to make sure the transition is as painless as possible, once you find a new advisor to suit your changing needs.

Read the Fine Print

Take a look at your management contract with the current advisor. There should be a clause included describing how to formally sever the relationship. There may be termination fees involved, so read carefully.  Ask if your investments are locked down. Some contracts can tie your assets up for a certain period of time.  Cashing these out early could incur penalties.

Transfer of History and Accounts

The good news, thanks to a 2011 ruling, is that your current advisor is required to transfer the historical records of all your securities to the new advisor.  Once you find a new advisor, the transfer itself can be performed with an authorization form. Most of the switch can be made with your assets transferring “in kind,” or without rolling them over. This is ideal, because the IRS has limits about the number of rollovers that can be performed in a year, and exceeding that limit can have tax consequences.

When providing a list of all accounts needing to be transferred, double check all your details are correct. Multiple account transfers can be slowed by rejections when numbers don’t correspond, or trust documents aren’t provided.

Follow Through

It doesn’t stop there, however. While you can leave it to your new advisor to trigger the transfer from their end, get proof of rescission your former advisor has severed his or her authority over your accounts If you’re against the idea of a face-to-face meeting with the former advisor, making a phone call to the old advisor during the transfer process can help facilitate matters. After all, trading should stop during the transition, and while no one likes having to discuss why things didn’t work out, it can help you both to understand where the holes appeared in the relationship so they can be avoided in the future.

There are all kinds of reasons people grow unhappy with their current financial advising team, whether it’s under performance, a change in attitudes, or a shift in focus. It doesn’t have to be a painful move from one advisor to another, and with a little up front knowledge, you can make the transition as smooth as possible. From there, it’s onward and upward.


NEILL YELVERTON IS A REGISTERED INVESTMENT ADVISER. INFORMATION PRESENTED IS FOR EDUCATONAL PURPOSES ONLY AND DOES NOT INTEND TO MAKE AN OFFER OR SOLICITATION FOR THE SALE OR PURCHASE OF ANY SPECIFIC SECURITIES, INVESTMENTS, OR INVESTMENT STRATEGIES. INVESTMENTS INVOLVE RISK AND UNLESS OTHERWISE STATED, ARE NOT GUARANTEED. BE SURE TO FIRST CONSULT WITH A QUALIFIED FINANCIAL ADVISER AND/OR TAX PROFESSIONAL BEFORE IMPLEMENTING ANY STRATEGY DISCUSSED HEREIN.