What Do You Ask at the First Meeting?

The decision to engage a professional to help you manage your finances is not an easy one. Once you have decided the time is right, you may need guidance to help you make a decision on the right professional to hire. If you frequent MSBNC, Yahoo or other search engines, you know the number of choices can be mind-boggling. What you need to know is that the decision you make today can have a big impact on your wealth and ability to achieve future financial goals. To help you narrow your options, here are five important questions to ask potential wealth advisors:

What do you ask at the first meeting?


Are you a Registered Investment Advisor or a Registered Representative of a Broker–Dealer?

Registered Representatives/Retail Brokers
A retail broker, also known as a registered representative, acts as an agent for his/her firm. This is important because even though you are a customer and the broker may be trying very hard to provide great service, a broker’s primary responsibility is to the firm. When you open a brokerage account, the broker is not held to the standards of the Investment Advisors Act of 1940 and thus is not required to act in your best interest.
You should be aware that a broker is typically limited to selling investment products approved by the firm and is generally compensated more for selling those products.

Fee-based Advisors
In contrast, a fee-based investment advisor is legally required to act as a fiduciary to their client. This means that the advisor must put their clients’ best interests first, and if conflicts of interest are present the advisor is legally obligated to disclose them.

Generally, fee-based investment advisors will calculate their fee based as a percentage of the amount of assets that they manage or advise upon for you. The compensation should be described in a straightforward and visible fashion.

You will want to verify whether you are dealing with a broker or an investment advisor.
As easy it sounds, it’s not always so easy to tell in practice! A broker may call him/herself any number of names, from financial advisor and financial consultant to a title containing the word “independent.” The best way to clearly identify a broker is to ask if they are a Registered Representative. If the answer is yes, they are likely not held to the same fiduciary standard as an investment advisor. If the person you are working with is a Registered Investment Advisor you should receive a document called an ADV, which outlines the practices of the firm as well as provides information on the individual you are meeting with.

Will you act as a fiduciary (by putting your client’s interest first)?

The tide has changed and investors are generally more knowledgeable and willing to ask if a financial advisor is on their side. A Registered Investment Advisor is required by law to act as a fiduciary on your behalf. This means the advisor must act in good faith and in the best interest of the client. To avoid conflicts of interest, a client-focused advisor will not receive compensation that is dependent on any client’s purchase or sale of a financial product or on executing transitions within the client’s account.

How is your firm compensated?

It is very important to know how the advisor and the firm are compensated. If the advisor is fee-based, 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 upon. You will also want to know if you will have to pay a minimum fee to ensure there are no surprises.

Ask if the advisor is compensated with commissions or something called “soft dollars.” Commissions or “soft dollars” are typically payments or benefits made available to the advisor for the sale of securities, insurance or other products to the client. Such payments are an indicator that your advisor could benefit from making certain investment or product recommendations to you. You should be and feel completely informed of all of your advisor’s compensation and you should be certain that his or her recommendations are made in the good faith belief that they are the best for you.

Have you ever been disciplined by any government regulator for unethical or improper conduct or been sued by a client who was not happy with the work you did?

Before you meet the advisor, do your own research to see what public information is available. The majority of investment advisors must file a disclosure form called an ADV with either the SEC or state regulators. Form ADV includes two parts: Part 1 contains statistical information on the organization while Part 2 covers services, fees and business strategy.

To get copies of Form ADV, go to the Investment Advisor Public Disclosure website.

What is the level of service I can expect?

The financial services industry is known for training brokers or self-titled advisors to sell products you may not need. Before you meet a prospective advisor, have a good understanding of what your needs are and what questions to ask regarding the quality of services you are seeking. When you sit down with the advisor is it more important that they ask you qualitative questions about your life or that they just talk at you with investment jargon? Or worse yet, the advisor may try to dazzle you with hypothetical results were you to invest your money with them.

As part of your process in hiring an advisor, you will want to learn about the full range of financial topics they are knowledgeable on and have experience with. Present the advisor with a challenging issue, perhaps one that you or a friend have been dealing with, and have them present a solution. Be assertive and careful in determining if you and the advisor are a good fit together.

A trusted advisor should ask discovery questions1 such as, “when are you targeting to retire?” or “what is the most important financial issue in your life at this moment?”
Does this sound like someone you would entrust your future to? If your answer is yes, you are on the right track to hire someone with your best interests in mind.


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 www.adviserinfo.sec.gov. 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.
Pat Brault

CPA, CTFA | Principal, Senior Financial Advisor

Patrick Brault, CPA, CTFA, is a Principal and Senior Financial Advisor for Wipfli Financial Advisors in Minneapolis, MN. Patrick focuses on comprehensive financial planning and investment management for business owners, retirement plans and foundations, as well as advanced planning for seniors and family caregivers.

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What Do You Ask at the First Meeting?

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