Top 5 Questions to Ask Your Financial Advisor | Part 2

Today we present the second of a two-part series dedicated to improving your financial advising experience. Part one provided the top 3 questions you should ask your financial advisor, including important issues of representation, client interests and written agreements.

top 5 question for financial advisors
Continued — #4 and #5 most important questions to ask your Financial Advisor


4.        How is your firm compensated?

Another way to ask this is to question whether or not there are financial incentives (for the advisor, for the firm or for the firm’s management) given for the advisor to recommend certain products.

It is very important to know how the advisor and the firm are compensated. If the advisor is fee-only, you will want to know how this is charged. It could be an hourly rate, a flat fee or most commonly a percentage of assets advised. You will also want to know if you will pay a fee monthly, quarterly or annually, and, whether the fee will be collected in advance.

You also want to find out if the advisor is compensated with commissions. These can be from selling securities, insurance or other products. This compensation model indicates that your advisor benefits from making certain investment or product recommendations.  You should be completely informed on all of the advisors’ compensation and you should be certain to make sure their selections are the best choice for you.

5.        Does the advisor take custody of, or have access to, your assets?

It is fairly typical to allow an advisor to debit your investment account for their fee. However, you should avoid allowing an advisor to have physical custody of your investment assets. This indicates that the advisor could make transfers or withdrawals from your account. Generally a fee-only advisor will not have this type of custody situation. Typically the fee-only advisor uses a “qualified custodian” who is normally an unaffiliated brokerage firm to maintain physical custody of your assets and to provide you separate reporting as to the value of your assets.


The person you select for the role of becoming your professional financial advisor will become an important member of your financial advisory team. It is key that you find someone with whom you have a personal connection and feel you can trust. You will be sharing valuable and confidential information with this person in order for them to provide the best advice to you. You will need to have a good platform to work together.

It is also important that you identify someone that uses an investment philosophy that you believe in and that you can feel comfortable with. An investment advisor should be able to clearly articulate their investment philosophy for you.

Of course, you should review the range of services that will be provided. Some advisors offer only asset management and some offer personal financial planning and a range of additional services. You should make sure that your needs are covered or that you have a resource for those other areas that the investment advisor you choose does not offer services for.

It is always good to understand what types of clients that your advisor works with and what type is an ideal client for them. It is best to pick an advisor where your needs are well described in the areas that the advisor focuses on. This way you know that all of the experience will also apply to you.

It is also good to learn about an advisor’s background, experience and education. Then you know what they are bringing to the table as part of your advisory team.

Most importantly, feel free to ask questions. A good advisor will be happy to help you by providing information and written materials about their business. And, be sure to ask the top five questions, before hiring a financial advisor!


This concludes our two-part series on the top 5 questions you should be asking your financial advisor today. Did we leave anything out? Can you think of additional questions you have asked or wanted to ask your advisor?

Wipfli Financial Advisors, LLC (“Wipfli Financial”) is an investment advisor registered with the U.S. Securities and Exchange Commission (SEC); however, such registration does not imply a certain level of skill or training and no inference to the contrary should be made. Wipfli Financial is a proud affiliate of Wipfli LLP, a national accounting and consulting firm. Information pertaining to Wipfli Financial’s management, operations, services, fees and conflicts of interest is set forth in Wipfli Financial’s current Form ADV Part 2A brochure and Form CRS, copies of which are available from Wipfli Financial upon request at no cost or at Wipfli Financial does not provide tax, accounting or legal services. The views expressed by the author are the author’s alone and do not necessarily represent the views of Wipfli Financial or its affiliates. The information contained in any third-party resource cited herein is not owned or controlled by Wipfli Financial, and Wipfli Financial does not guarantee the accuracy or reliability of any information that may be found in such resources. Links to any third-party resource are provided as a courtesy for reference only and are not intended to be, and do not act as, an endorsement by Wipfli Financial of the third party or any of its content or use of its content. The standard information provided in this blog is for general purposes only and should not be construed as, or used as a substitute for, financial, investment or other professional advice. If you have questions regarding your financial situation, you should consult your financial planner, investment advisor, attorney or other professional.
Janice Deringer


Janice L. Deringer is a member of Wipfli Financial's Investment Committee and a consultant who focuses on serving individual and corporate clients. She brings over 20 years of institutional investment management experience to her strong interest in educating women and individuals regarding financial decisions, realities and possibilities.

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Top 5 Questions to Ask Your Financial Advisor | Part 2

time to read: 3 min