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What questions should I ask before hiring an advisor?

Practical steps to check filings and search advisors on Best Investors.

The short answer

Ask for written answers on fiduciary duty, fees, conflicts, custody, who will do the work, disclosure history, and minimums before you sign. Pre-read the firm’s Form ADV on Best Investors and check the pitch against Item 5E (fees), Item 5G (services), Item 9 (custody), and Item 11 (disclosure). Treat unclear answers as a reason to wait.

What to do

  1. Open Search, find nearby firms, and open two or three firm profiles. Pro listings ($9.99/month) sort first after the geographic fetch. That is paid placement, not a quality score.
  2. On each firm ADV panel, pre-read 5E (compensation), 5G (services), 9A (custody), and Item 11 (disclosure). Use the Form ADV guide for codes and how to read Item 11 for disclosure rows.
  3. Open Form ADV Part 2A (brochure) and Form CRS from the firm page when linked. If they are missing, download them from IAPD for the same CRD. Part 1A names categories. The brochure and agreement state rates and terms. For site vs government file, see Best Investors vs SEC IAPD.
  4. Email the question list below and ask for written answers. Compare the reply to the ADV panel and the brochure.
  5. If the answers match the filing and the service fits, continue with how to hire a financial advisor. If they do not match, ask for a correction or stop.

Questions to copy into an email

  1. Do you act as a fiduciary for the advice and accounts I am considering, and will you put that duty in writing in the advisory agreement?
  2. What is the full fee for my situation (rate or dollar amount, billing frequency, advance vs arrears)? What is included, and what is billed separately (custodian, fund expenses, trading, planning projects)?
  3. Are you fee-only, or do you or related persons also receive commissions, 12b-1 fees, or other product payments? (Compare to Item 5E and fee-only vs fee-based.)
  4. What conflicts apply to my relationship (affiliates, soft dollars, referral payments, proprietary products)? Where are they disclosed in Part 2A?
  5. Who is the qualified custodian for my assets? Do you or a related person report custody under Item 9? How do I get account statements, and from whom?
  6. Who will do the work day to day: the person I meet, a team, or a third-party model or sub-adviser? Who has trading authority?
  7. Does Item 11 show any Yes answers for the firm or supervised persons? If yes, summarize the event, date, outcome, and whether those people still work with clients.
  8. What is the account or relationship minimum, and what happens if my balance falls below it?
  9. Which Item 5G services apply to me (for example financial planning vs portfolio management), and which are out of scope?
  10. Can I see a sample advisory agreement, Form CRS, and the fee schedule that would apply before I sign?

What to look for on Best Investors

Use the firm ADV panel as a pre-meeting checklist, not as a scorecard.

  • Item 5E: Yes boxes name compensation categories (AUM fees, hourly, fixed, commissions, performance-based, other). They do not show your rate.
  • Item 5G: Service checkboxes show what the firm reports offering. Match them to the work you want.
  • Item 9: Custody Yes answers mean you should ask who holds the assets and how statements arrive. Unclear custody is a red flag.
  • Item 11: Read each Yes row. A clean panel is self-reported, not a government clearance. See how to read Item 11.
  • Search and Pro: Distance is the geographic sort. Pro can put a paid listing above a closer unpaid one.
  • IAPD cross-check: If a profile looks wrong or stale, open the same CRD on IAPD and treat that file as the original.

Common mistakes

  • Hiring on personality and skipping written fee and fiduciary answers.
  • Treating “fee-based” as “fee-only” without checking Item 5E for commissions.
  • Ignoring Item 11 because the office looks polished or AUM is large.
  • Assuming the person in the meeting will manage the account.
  • Not knowing who holds the assets or who sends statements.
  • Reading Pro sort as a recommendation. It is paid placement after the location fetch.
  • Stopping at Part 1A checkboxes and never reading Part 2A and the agreement.

Related questions

What does “fiduciary” mean in this conversation?

You are asking whether the adviser will put your interests ahead of their own for the advice and accounts they manage for you. Registration brings fiduciary duties under federal or state rules, but the scope still belongs in the agreement. Ask for the duty in writing.

How do I use Form ADV before the first meeting?

Open the firm profile and scan Item 5E, 5G, 9, and 11. Then open Part 2A for fee tables and conflict narratives. Bring mismatches to the meeting (“Item 5E shows commissions; your email said fee-only”). Use the Form ADV guide and verify the CRD on IAPD.

What is the difference between fee-only and fee-based?

Fee-only usually means client fees only, without product commissions. Fee-based often means client fees plus other compensation. Item 5E shows categories. The brochure and agreement show what you will pay. See fee-only vs fee-based.

Why does custody matter if I never see a paper certificate?

Custody under Item 9 is about who can move or control client assets under the Form ADV definition, not about vault storage. Get a clear custodian name, statement path, and any adviser authority to deduct fees or transfer funds.

What if Item 11 has a Yes?

A Yes is a disclosure flag, not an automatic disqualification. Read the row, date, outcome, and whether those people still serve clients. Ask for a written summary and compare it to how to read Item 11.

Limits

Best Investors is not a regulator and not legal or investment advice. This page is a hiring checklist, not a recommendation to hire or avoid any firm.

Form ADV answers are self-reported by the adviser. Best Investors does not audit fees, AUM, custody quality, or Item 11 narratives.

Pro listings ($9.99/month) sort first in search and directories after the geographic fetch. That is advertising, not a quality score.

Feed timing: pages update after ingest jobs run. If the live IAPD filing differs from a Best Investors page, treat IAPD as the original.

Sources

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