Questions to Ask Your Financial Advisor Before Investing

If you’re new to investing or are considering learning more about what is happening with your money, it may be time to sit down with your advisor and have a good conversation. Of course, everyone wants to maximize returns with as little risk possible, but how it is proposed to actually accomplish that goal varies with each advisor. As important is that you can speak with the broker and feel he or she is really listening. Spinnaker Investment Group has clients from every walk of life, each with their individual investment goals, and we realize the importance of personalized service.

Some of the issues you may wish to explore:

Start with the basics. 

Are you a fiduciary? How much experience do you have? How long have you been an advisor? Do you have any references I can contact? You may already know some of the answers, but these are good conversation starters and can provide a basic understanding of how you and the advisor will get along.

What is the commission and fee structure? 

Not only can high fees and commissions erode potential profits but learning of their existence after the fact has been the cause of dissatisfaction among many investors and their advisors. Every brokerage house should have a detailed list of their brokerage fees available with which you can compare to others for reference.

What is your investment or trading strategy? 

For many new investors, this may be a learning experience. Even if different from yours or what you anticipated would be said, listening and evaluating is the key. The advisor very well may have an approach that works well with your ultimate goals that you hadn’t considered.

When the time comes, ask specific questions about specific investments. 

Start with the fundamental issue: Why is this a good investment for me? A variety of factors will influence the answer, such as your age, investment goals, risk tolerance, and financial circumstances. Follow up questions to ask include, what needs to happen to make the investment profitable, how liquid it is, and what’s the worse-case scenario if the investment doesn’t perform well. An unsatisfactory response may indicate the broker hasn’t fully researched the investment or perhaps that investment just isn’t right for you.      

What potential conflicts of interest do you or your firm have in receiving incentives to recommend a specific investment? 

The only way to know is to ask. The response needs to be clear and direct. Anything less is a major red flag.

Hopefully your relationship with your advisor is a long and mutually profitable one. We at Spinnaker welcome your inquiries and look forward to earning your business.


The information contained herein is based on internal research derived from various sources and does not purport to be statements of all material facts relating to the securities mentioned. The information contained herein, while not guaranteed as to the accuracy or completeness, has been obtained from sources we believe to be reliable. Opinions expressed herein are subject to change without notice.


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