10 Questions to Ask a Financial Advisor Before You Hire One (And What the Answers Should Sound Like)

Hiring a financial advisor is one of the most important decisions you can make. The right advisor can meaningfully improve your retirement outcome, reduce your lifetime tax burden, and give you genuine confidence in your financial plan. The wrong one can cost you tens of thousands of dollars in unnecessary fees, suboptimal advice shaped by conflicting incentives, and years of under-optimized planning.

And yet most people spend more time researching a car purchase than interviewing a financial advisor.

Part of the reason is that the financial services industry is confusing. Credentials are inconsistently regulated. Fee structures are not clear. The distinction between a fiduciary and a non-fiduciary is critically important but not well understood by most consumers. And advisors who are not serving your interests well are rarely going to volunteer that information.

The questions below are designed to cut through the opacity. Where relevant, we have provided our own answers from Arcadia Private Wealth, because we think transparency is part of what good advice looks like.

Question 1: Are You a Fiduciary, All the Time?

This may be the the most important question on the list. The word fiduciary means the advisor is legally obligated to act in your best interest at all times. It sounds like the baseline standard for any financial professional, but it is not.

Many financial advisors, particularly those working at broker-dealer firms, are held only to a suitability standard. This means they are required to recommend products that are suitable for your situation, not necessarily the products that are best for your situation. A commission-based product that generates a 5% fee for the advisor might be suitable. It might also not be the best available option. Under the suitability standard, the advisor is not required to tell you there is a better option.

Some advisors are fiduciaries in some contexts and not in others, particularly dually-registered advisors who operate both as investment advisors (fiduciary) and as broker-dealers (suitability standard). Ask explicitly: are you a fiduciary at all times, in all contexts, for all recommendations?

At Arcadia: We are a fiduciary, always. We are registered as a Registered Investment Advisor and hold no broker-dealer registration. Every recommendation we make, in every context, is governed by the fiduciary standard. There are no exceptions and no dual registrations that may create gray areas.

Question 2: How Are You Compensated, and What Are All the Ways You Make Money?

Fee transparency is one of the most important criteria when evaluating a financial advisor. Advisors can be compensated in many ways:

• Commission-based: The advisor earns a commission when you purchase a financial product. The conflict of interest is usually structural: the advisor is financially incentivized to recommend products that pay higher commissions, regardless of whether those products are the best fit.
• AUM-based: The advisor charges a percentage of the assets they manage for you, typically 0.75% to 1.25% per year. The potential conflict: an AUM advisor my be financially disincentivized from recommending that you pay off your mortgage, make a large charitable gift, or take any other action that reduces the assets under their management.
• Flat fee: The advisor charges a fixed annual fee that does not vary based on portfolio size or products purchased. No commissions. No percentage-of-assets incentives. The advisor's incentive is to keep you as a client.
• Fee-only hourly or project-based: The advisor charges by the hour or by project. This works well for specific, bounded engagements but not be practical for ongoing financial planning and investment management.

Ask not just the stated fee but also whether the advisor receives any compensation from third parties, including investment companies, insurance companies, custodians, or their parent company.

At Arcadia: We are flat fee, fee-only. Our compensation is a flat annual fee of $18,000 per year, billed quarterly at $4,500. We receive no commissions. We receive no revenue sharing from investment managers. We receive no compensation from any third party in connection with any recommendation we make. Our fee does not change based on how large your portfolio is, what you invest in, or what financial decisions you make.

‍Question 3: What Credentials Do You Hold, and What Do They Mean?

The financial services industry has more than 200 professional designations! The credentials worth understanding:

• CFP® (Certified Financial Planner): Requires a bachelor's degree, completion of a CFP Board-registered education program, a minimum of 4,000 to 6,000 hours of professional experience, passage of a comprehensive board exam, and 30 hours of continuing education every two years. CFPs are also required to act as fiduciaries when providing financial planning advice. This is a meaningful credential that indicates broad financial planning competence.
• CFA (Chartered Financial Analyst): A rigorous credential focused on investment analysis and portfolio management. Three levels of exams with an average combined pass rate below 50%. More relevant for investment management than comprehensive financial planning.
• CPA (Certified Public Accountant): A credential in accounting and tax. Particularly valuable if tax planning is a significant component of what you need.
• TPCP®(Tax Planning Certified Professional): A credential focused specifically on tax planning strategy. Indicates advanced knowledge of tax planning tools including Roth conversions, tax-loss harvesting, income sequencing, and related techniques.

At Arcadia: Grant Webster holds both the CFP® and TPCP® designations. The CFP® reflects comprehensive financial planning competence and an ongoing fiduciary obligation to clients in planning contexts. The TPCP® reflects specialized focus on tax planning strategy, which is a central component of how we serve clients.

Question 4: What Services are Included in Your Fee?

Financial planning is a collection of interrelated services, and what is included in an advisor's stated fee varies considerably. Many advisors who charge an AUM fee include investment management and not much else. Ask specifically:

• Is ongoing financial planning included, or just an initial plan?
• Does the fee cover tax planning and coordination with my CPA?
• Are Social Security claiming analysis and Medicare planning included?
• Do you review my estate plan and coordinate with my attorney?
• How often will we meet, and what does the ongoing service model look like?

At Arcadia: Our flat fee covers all planning services. Comprehensive financial planning. Investment management. Tax planning, including Roth conversion modeling, income sequencing, and coordination with your CPA. Social Security optimization. Medicare planning. Estate plan review and coordination with your estate attorney. Insurance review. Annual meetings plus ongoing access for any questions that arise throughout the year. We do not have service tiers, and we do not charge extra for additional planning work.

Question 5: How Many Clients Do You Work With?

The number of clients an advisor serves directly affects the quality of service you receive. An advisor managing 200 client households has 200 sets of planning situations to keep current and 200 families to proactively reach out to when something relevant changes. The math does not support deep, proactive service at that volume. At that scale, most client interaction is reactive, communication is templated, and the plan is probably not updated unless you ask.

An advisor with 50 to 100 client households can know each client situation deeply, proactively identify planning opportunities, and provide the kind of responsive service that actually makes a difference over time.

At Arcadia: We deliberately limit our practice to approximately 45 client households. This is a conscious decision, not a function of where we happen to be in our growth. We believe it is impossible to provide the depth of service our clients deserve at a meaningfully larger scale. Every client's plan is known and current.

Question 6: Do You Have Experience With Clients in Situations Like Mine?

Financial planning looks very different across different stages of life and different financial situations. An advisor who primarily serves young professionals accumulating wealth may not have deep experience with the retirement income, tax, Social Security, and Medicare questions that matter most for someone approaching or already in retirement.

Ask whether the advisor has specific experience with your situation, and ask who their typical clients are. An advisor who primarily serves 30-somethings with $200,000 in assets may have a practice that is not well-calibrated for your needs if you are a 60-year-old with $4 million.

At Arcadia: We work specifically with successful families and individuals who are approaching retirement or already in retirement, typically with investable assets between $2 million and $10 million. The questions that dominate our work, including how to sequence income in retirement, how to minimize lifetime taxes, when to claim Social Security, how to optimize Medicare, and how to build a portfolio that supports 30+ years of withdrawals, are the questions we engage with for every client.

Question 7: What Is Your Investment Philosophy?

The investment approach an advisor takes has a direct effect on your returns over time. Some advisors believe in active management, picking individual securities or actively managed funds based on their assessment of market opportunities. The evidence on active management is not too favorable. Over the past 20 years, more than 90% of actively managed U.S. equity funds have underperformed their benchmarks after fees.

Ask specifically: do you pick individual stocks? Do you use actively managed funds? What is your view on market timing? How do you approach tax efficiency in the portfolio?

At Arcadia: We do not pick individual stocks and we do not attempt to time the market. We believe markets are broadly efficient, that consistent outperformance through active management is not achievable reliably over time, and that the primary driver of investor outcomes is behavioral, not stock selection. We build portfolios around evidence-based ETFs from Avantis, Dimensional Fund Advisors, and Vanguard, which deliver broad diversification, low costs, and deliberate exposure to the return factors the academic research supports. Tax efficiency is integrated into every investment decision.

Question 8: How Will We Communicate, and How Accessible Are You?

The value of a financial advisor is not just in the plan they create at the beginning of the relationship. It is in the ongoing guidance they provide as circumstances change, markets move, and life evolves. Ask specifically: how often will we meet formally? How are you available between meetings? If I have a question on a Monday morning, can I reach you directly? Will I work with you personally or be handed off to an associate?

At Arcadia: We meet with clients multiple times each year, and more frequently when circumstances warrant. Between meetings, clients can reach us directly by phone or email. When something significant happens, including a tax law change, a major market event, or a planning opportunity, we reach out proactively.

Question 9: What Does Success Look Like in Our Relationship?

This question is rarely asked and is one of the most revealing. An advisor's answer tells you how they define their role and what they believe they are responsible for delivering.

A good answer is not a market return benchmark. Markets determine returns, and no honest advisor will claim to consistently outperform the market. A good answer describes what comprehensive, well-coordinated planning actually produces: a clear financial plan you understand, tax-efficient retirement income, a plan for long-term care and estate distribution, and genuine confidence in your financial future.

At Arcadia: Success looks like clients who genuinely understand where they stand financially, who have a coordinated plan covering investments, taxes, income, and estate planning, who are not surprised by things that were foreseeable and plannable, and who can enjoy their retirement and spend the wealth they've worked so hard to build.

Question 10: What Should I Expect in the First 90 Days?

The onboarding experience with a new financial advisor tells you a great deal about the firm's organization, thoroughness, and approach. A good onboarding process should result in a comprehensive understanding of your current financial situation, a clear set of priority recommendations, and a foundation for the ongoing planning relationship. Ask: what information will you need from me? When will I see an initial plan or set of recommendations?

At Arcadia: In the first 90 days, we gather your complete financial picture: account statements, tax returns, insurance policies, estate documents, and benefits information. We build a comprehensive model of your current situation and identify the most time-sensitive opportunities, including Roth conversion windows, Social Security claiming decisions, or tax harvesting opportunities. By the end of the first 90 days, you should have a clear understanding of where you stand, what we recommend and why, and a framework for the ongoing planning relationship. The plan is a living document that we revisit and update as your situation evolves.

A Note on Red Flags

Beyond the questions above, there are a few responses that should give you pause regardless of how confident the advisor sounds.

• An advisor who cannot clearly explain their fee in dollar terms. If the answer to 'how much do I pay' is anything other than a specific number, ask until you get one.
• An advisor who is not a full-time fiduciary. Dual registration, commission compensation, and suitability-standard products exist in an incentive structure that is not fully aligned with your interests.
• An advisor who emphasizes their investment performance record. Past performance does not predict future performance. An advisor whose primary pitch is how well their portfolios have performed is either misleading you or misleading themselves.
• An advisor who cannot tell you the names of their investment funds and their expense ratios. You should know exactly what you own and what you are paying for it.

Most people underinvest in the process of choosing a financial advisor. The interview is the highest-leverage part of the relationship, because it is the point at which you have the most information and the most choice.

The ten questions above will tell you more about the quality and integrity of a financial advisor than any amount of marketing material or online reviews.

At Arcadia Private Wealth, we welcome all of them. If the answers we have provided here sound like what you are looking for, we would be glad to continue the conversation.

Schedule a complimentary consultation at arcadiaprivate.com 

Disclosure: This article is for informational purposes only and does not constitute personalized financial advice. Arcadia Private Wealth LLC is a Registered Investment Advisor.