Checklist: 7 Questions Every Advisor Should Be Able to Answer

AT ONE TIME OR ANOTHER, WE ALL face major turning points in our lives—getting married, becoming a parent, receiving a life-changing promotion, getting ready to retire. At times like these, many people feel a need for financial help. They begin to question whether they know enough about the complex financial decisions they’ll have to make to continue to go it alone and start to wonder whether working with a financial advisor might make sense.

The challenge is finding someone you'll feel comfortable talking to about the most personal things—your family, your money, your hopes for your future. Someone who'll be there for you for years to come, and who can provide more than just stock recommendations.

The challenge is finding someone you'll feel comfortable talking to about the most personal things—your family, your money, your hopes for your future.

As you interview advisors who may be able to help you with those decisions, don't be afraid to ask the following tough questions—they'll help you get a clear idea of what you can expect if you move ahead with the relationship and whether it would be a good fit for you and your family.

1. What types of clients do you work with?
Some advisors have special experience working with business owners or members of a specific profession. Others might have particular knowledge in a specialty, such as sustainable investing or retirement planning. Ask what team members or resources from around their company they can call upon to help you meet your specific needs.

2. What is your track record?
No advisor can or should promise financial results based on past performance. And beware those who do. But an advisor with a record of long relationships with clients likely provides the kind of service that earns their loyalty.

3. How often will we work together? What is the relationship like?
There is no one-size-fits-all answer to this question. An advisor should be committed to conversations in person, by phone, or online—whatever your preference is—as often as you require. Every client has different needs and expectations. Don’t be shy: Be upfront about how frequently and by what means you would like to get together to discuss your finances. Some people prefer a more formal relationship, with regularly scheduled meetings, while others might be more comfortable with a less structured, more relaxed approach to financial conversations. Make your personal preferences known from the outset. You can also get a sense of what the relationship will be like by gauging how interested the advisor is in learning what your goals are, what’s most important to you—and what keeps you up at night.

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Watch "Making the Leap" to see how one couple built a business while keeping their retirement goals in sight, with the help of their advisor.

4. How can you help me stay on track as I pursue my goals? Am I on the right track?
In order to have the potential to realize your goals, you have to clearly define them first. Even if you have a strong idea of what you want to accomplish with your money, the right advisor can help you better understand and prioritize how you might get there, including helping you understand any necessary tradeoffs you may have to make based on your finances, time horizon, cash flow needs and investing preferences. Life has a way of changing, too—sometimes without notice—so the advisor you select should encourage you to check in on an ongoing basis, whenever your situation changes, to discuss any course-correcting that may be needed to make sure you stay on the right track.

5. Do you have investments that align to my values?
The choices you make every day—from where you choose to eat to the companies you choose to invest in—can be a reflection of your deeply held beliefs. Your advisor should be able to offer investments that take your values into account—whether in the area of sustainability, social responsibility or corporate governance. These investments should also be vetted with the same rigor as other more traditional choices, so that they are aligned with all your other investments.

6. What happens if the markets are volatile? Will you call me?
When markets get scary, there's nothing worse than feeling isolated and alone. One of an advisor's most vital functions is to reach out at such times, hear your concerns, offer perspective, and talk about any needed adjustments to your strategy.

7. How do I pay you for your work—and how much will it cost?
It's never easy to ask, but the right advisors will welcome this question. Clarity about fees is vital to a successful relationship. Payment—whether a percentage of assets or per transaction—should be structured around your needs and preferences.