12 Questions to Ask Before Hiring a Financial Advisor
A Fiduciary’s Guide for Investors
Questions to Ask
Before Hiring a
Financial Advisor
There are two very different types of financial advisors — and the wrong one can cost you dearly. These are the 12 questions that separate fiduciaries from salespeople.
87%
of investors don’t know
their advisor’s legal standard
$180K
est. lifetime cost of conflicted
advice on a $1M portfolio
12
questions that reveal
exactly whose side they’re on
30+
years Thomas Davies has served
as a fee-based fiduciary
Why It Matters
Not All Advisors Are
Created Equal
The title “financial advisor” is unregulated. Anyone can use it. The critical distinction is whether your advisor is legally bound to act in your interest — or merely permitted to act in theirs.
These 12 questions reveal compensation structures, regulatory registrations, disciplinary histories, and real capabilities — everything that determines whether your advisor is your partner or your vendor.
Fiduciary Standard
Legally required to act in your best interest at all times. Registered Investment Advisers (RIAs) are held to this standard by the SEC.
Suitability Standard
Only required to recommend products that are “suitable” — even if better, lower-cost options exist. Broker-dealers operate under this looser standard.
“The same person can be a fiduciary for one account and a broker for another. Always ask explicitly — and get it in writing.”
— Thomas Davies, CFS
The Complete Checklist
12 Questions to Ask
Any Financial Advisor
Bring this list to your first meeting. A trustworthy advisor will answer every question directly — and without hesitation.
Are you a fiduciary — and are you a fiduciary 100% of the time?
Good Answer
“Yes. I’m an SEC-registered RIA and bound by fiduciary duty in every client interaction — always, without exception.”
Red Flag
“I follow the suitability standard” — or any hesitation about “100% of the time.” Dual-registered advisors can legally switch hats mid-conversation.
Exactly how are you compensated for your advice?
Good Answer
A clear, written fee schedule — percentage of AUM, flat fee, or hourly. Full disclosure of any additional circumstances where they may earn commission.
Red Flag
Vague answers like “the investments pay me” or “my firm handles that.” Multiple undisclosed revenue streams are a structural conflict of interest.
Do you receive commissions or third-party payments on products you recommend?
Good Answer
Full transparency. If they earn any commissions (e.g., on annuities), they disclose the amount in writing, explain when it applies, and describe how they manage the conflict.
Red Flag
Claiming zero product compensation while also holding a FINRA broker-dealer license. This is a structural contradiction worth pressing on.
Are you registered as a Registered Investment Adviser (RIA) with the SEC?
Good Answer
Yes — and they give you their CRD number and encourage you to verify independently at advisorinfo.sec.gov before your next meeting.
Red Flag
Only FINRA-registered (broker-dealer), no RIA registration, or can’t clearly distinguish between the two regulatory regimes when asked.
Can I see your Form ADV Part 2?
Good Answer
Of course — they hand it over or link to their public SEC filing without hesitation. It’s legally required to be provided to all prospective clients.
Red Flag
Confusion about what it is, resistance to sharing it, or “I’ll have compliance send it later.” All SEC-registered RIAs are required to file and disclose it.
Have you ever had disciplinary actions, complaints, or regulatory issues?
Good Answer
A clean record — and they invite you to verify at advisorinfo.sec.gov yourself before committing. Transparency here signals nothing to hide.
Red Flag
Vague reassurances without offering to let you verify. Or a history they explain away as “frivolous” — check the public record yourself, always.
What professional credentials do you hold, and what did they require to earn?
Good Answer
Named, regulated designations (CFS, CFA, CFP®) with clear explanation of the education, exams, and ongoing continuing education required to maintain them.
Red Flag
Generic titles like “Senior Wealth Consultant” with no verifiable designations. Some credential-sounding titles require nothing more than a weekend course.
How long have you been in practice, and have you managed through multiple market cycles?
Good Answer
Significant tenure (10+ years) with specific examples of how they guided clients through real downturns — the 2008 financial crisis and the 2020 COVID crash.
Red Flag
Only active since 2012–2020 (a historically unusual bull market). Advisors who haven’t navigated real downturns may not know how to handle the next one.
What is your investment philosophy, and how do you tailor it to each client?
Good Answer
Clear, consistent, evidence-based. They explain how they adapt to different risk tolerances, time horizons, and income needs — with real examples from their practice.
Red Flag
“We consistently beat the market” — no one does, consistently. Or answers that shift to match what they think you want to hear about risk.
Who actually holds my assets — and can I access statements directly from the custodian?
Good Answer
A well-known independent custodian (Schwab, Fidelity, Pershing) — and you receive direct account access, completely independent of the advisor.
Red Flag
Statements that only come through the advisor, or an advisor who maintains custody of your assets. This is the exact structure that enabled Bernie Madoff.
Who will I work with day-to-day, and what happens to my accounts if you leave?
Good Answer
A clear succession plan, a named relationship manager, and documentation of what happens to client accounts if the firm or primary advisor changes.
Red Flag
“It’s just me” with no succession plan. Solo practices without continuity planning create real risk for your accounts and long-term financial consistency.
What services are included in your fee — and what costs extra?
Good Answer
A written service agreement with specific scope — portfolio management, financial planning, tax coordination, estate support — and clear fees for each component.
Red Flag
Vague bundling where “comprehensive planning” is undefined. Always get the scope in writing before signing anything. If they can’t define it, they can’t deliver it.
Davies Wealth Management
Here’s How We Answer
Every One of These Questions
We wrote this guide because we’re confident in every answer. Ask us anything — we’ll answer the same way every time.
Fiduciary
Yes — 100% of the time. Thomas Davies is an SEC-registered RIA. We have never operated under the suitability standard and our fiduciary duty is unconditional.
Fee Structure
Fee-based. Our primary compensation is a transparent AUM fee. Where annuities serve a client’s planning goals, we disclose the commission in writing — always, before any decision.
Credentials
Thomas holds the CFS (Certified Fund Specialist) designation — 30+ years in practice through the dot-com crash, 2008, COVID, and beyond. Verify at advisorinfo.sec.gov.
Clean Record
No disciplinary actions. No complaints. No regulatory issues. We invite every prospective client to verify at advisorinfo.sec.gov before our first conversation — not after.
Custody
Your assets are held at an independent third-party custodian. You receive direct statements. We never control client assets — a non-negotiable safeguard we never compromise on.
Form ADV
Available on request and publicly filed with the SEC. We provide it to every prospective client before any commitment — it’s their right, and we lead with it.
Ready to ask us every question on this list?
No sales pitch. No pressure. Just straight answers — the same way every time.
Meet Your Advisor
Thomas Davies, CFS
Founder, Davies Wealth Management
For over 30 years, Thomas has operated as a fee-based fiduciary in Stuart, Florida — serving retirees, pre-retirees, and high-income professionals across the Treasure Coast and the Palm Beaches.
He built this guide because too many investors arrive at retirement having paid for advice that wasn’t truly designed for them. The right questions, asked early, change that outcome entirely.
30+
Years
SEC
Registered RIA
CFS
Designation
Thomas’s Promise
“Before you make any decision about working with us, you’ll have every answer you need. I’ve never had a client regret asking hard questions upfront — only those who didn’t.”
Educational content only. This guide is intended to help investors ask informed questions — it does not constitute investment, legal, or tax advice. Davies Wealth Management is a registered investment adviser. Registration does not imply a certain level of skill or training. Past performance does not guarantee future results. Please consult qualified financial, legal, and tax professionals before making investment decisions. (772) 210-4031 | 684 SE Monterey Road, Stuart, FL 34994 | DaviesWealthManagement@TDWealth.Net
We can help you make the most of what you have!