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5 Questions to Ask When Choosing a Financial Advisor-Certain Answers Can Be Red Flags

Choosing the right financial advisor can be a challenge. Just like with any other professional, you will need to “vet” them to see if they have the proper expertise, you need and if they fit your core values. Most financial advisors are fiduciaries, who act only in the best interests of their clients. Unfortunately, just like with any other industry, there are those in the financial sector who do not always act in the best interest of their clients and will be dishonest in how they are paid by you. When choosing the right financial advisor, be sure to ask these 5 important questions and listen carefully to the answers from the advisor as they can be a red flag.

What is your definition of a financial advisor?

The definition of a financial advisor will differ from professional to professional. Financial advisors will cover a variety of services from investments to retirement planner and insurance to taxes. Sit with each financial advisor to learn about what they specifically offer and how they can help with your specific financial needs and goals. Their answer will let you know their intentions and if they will be the right fit for you.

How do you get paid?

This is one of the most important questions to ask a potential financial advisor. Some financial firms will have hidden fees or be paid on commission, while other firms will be paid by a flat fee or percentage of assets under their management. Listen carefully to how they are paid, a financial advisory firm that is paid by commissions may be less likely to focus on your goals and rather how much they will make buying or trading certain investments. A financial advisor who is up-front about their pricing and take flat fees or a percentage of assets will be more likely to make decisions that are beneficial for you over them.

Are the “fee-only” or “fee-based”?

Similar to the payment structure, learning about how a firm takes their fees. Fee-based financial firms are paid through commissions and can lead to the temptation for them to recommend certain products or investments in order to be paid more compared to them prioritizing stocks that will fit your needs. For firms that work on a fee-only structure, they are only paid for their time working on your portfolios, their strategies, and the managing of your money. 

Asking both how the advisor is paid and what type of fee they take, will allow you to configure how much you will be paying your financial advisor per year and if that will fit into your current budget. 

Wil you sign a fiduciary oath?

Asking if a financial advisor is a fiduciary is sometimes not enough to ensure you will be protected. Some firms will claim to be a fiduciary firm, however, when it comes time to work on your investments, they will pick and choose those that will earn them extra compensation. It is easy for some professionals to “tiptoe” around the term fiduciary or not be clear in their answers. If they are a fee-only financial advisor then there should be no issue with them being able to sign a fiduciary oath. If the advisor comes across as nervous about signing this oath or try to get around having to sign the oath, this can be a major flag that they will not be acting in your best interest. 

Can I ask for references from current or former clients?

Today, it can be easier than ever to find out what type of reputation a business has with Google and social media reviews. However, that can sometimes not be enough and there are unethical businesses that will have fake reviews made or even pay for reviews. It is always in your best interest to ask each financial advisory firm for client references, whether they are current clients or former. If the financial advisor you are meeting with is hesitant to give you any client references, it could be a possible red flag.

If a firm has been honest and has done an excellent job with their clients, they should have no issue giving you some references to ensure they are going to do what they say they will. A firm that has not been acting in their clients' best interest or taking out hidden fees will be more likely to not want you speaking with current or former clients.

When choosing a financial advisor, it is important to ask questions and do your research. Asking these questions will help you choose an advisor that is ethical and honest, and who will best meet your needs. Do not be afraid to ask any of these questions, and an ethical financial advisor will have no problem answering or providing any references.

Another Successful Campaign with St. Jude

30 Apr, 2024
Sage Investment Advisers, LLC is pleased to announce another successful partnership with St. Jude in support of childhood cancer research. Through our joint efforts, we exceeded our fundraising target, providing essential support for the children and families affected by this important cause. From February 14th to April 1, 2024, Sage Investment Advisers, LLC initiated our annual campaign in collaboration with St. Jude. Our President, Jerry Schuder, conveyed, “At Sage Investment Advisers, LLC, we wish to extend our heartfelt appreciation to our friends, family, and clients for their invaluable contributions towards our St. Jude campaign. Initially set at $20,000.00, our fundraising goal for Valentine’s Day was surpassed by exceeding expectations with a total collection of $24,000.00. We feel privileged to provide these children with hope and are sincerely thankful for the unwavering assistance and encouragement received. We deeply appreciate your support.” Subsequent to the remarkable achievement of our fundraising initiative, St. Jude’s acknowledged our firm's generous donation through a letter of appreciation. Senior Development Director, Caroline Spiraco, stated in the correspondence addressed to our organization. " I am writing with deep gratitude for the incredible generosity you have demonstrated in supporting St. Jude and the Sage Investment Advisers LLC Share the Love for St. Jude Valentine's Day Campaign. We were thrilled with the success of the campaign, and it is because of the generosity of donors like you that we were able to provide critical support to the hospital. Your goal was $20,000 and we were blown away by the success of your effort with over $24,000 raised and donated!" Sage Investment Advisers, LLC is pleased to have collaborated with St. Jude to raise funds for essential services for children battling cancer. Our contributions will ensure these young patients receive necessary treatment without burdening their families with crippling debt. By alleviating financial pressures, families can focus on their child's well-being, offering them a renewed hope for a healthier future. Located in Poughkeepsie, NY, Sage Investment Advisers, LLC is an independent financial advisory firm specializing in services such as retirement planning, Social Security Optimization, and other vital financial solutions to support your present and future financial needs.
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