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What questions should I ask before hiring an advisor?

Ask about fiduciary duty, fees, conflicts, custody, who does the work, Item 11, and minimums. Pre-read Form ADV on Best Investors, then email this list.

The short answer

Before you sign, get written answers on the duty they owe you, the fees, the conflicts, who holds the money, who does the work, any past disclosures, and any minimum. Read Form ADV first. Check the pitch against Item 5E (fees), Item 5G (services), Item 9 (custody), and Item 11 (disclosures). If an answer is fuzzy, wait.

What to do

  1. Open Search, find nearby firms, and open two or three firm pages.
  2. On each ADV panel, read 5E (pay), 5G (services), 9A (custody), and Item 11 (disclosures) before the meeting. Use the Form ADV guide for codes and how to read Item 11 for the disclosure rows.
  3. Open the brochure (Part 2A) and Form CRS from the firm page when they are linked. Form CRS is the short relationship summary. If they are missing, download them from IAPD for the same CRD. The CRD is the ID number. Part 1A names categories. The brochure and the agreement state the rates. 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. Will you act as a fiduciary for the advice and accounts I am considering? A fiduciary has to be careful and put me first. Will you put that duty in the agreement?
  2. What is my full fee, as a rate and in dollars? Do you bill at the start of the period or after it? What is extra, such as fund costs, trading, or a planning project?
  3. Are you fee-only, or do you or related people also get commissions, fund marketing fees (sometimes called 12b-1 fees), or other product payments? Compare this to Item 5E and fee-only vs fee-based.
  4. What conflicts apply to me? That includes a sister company, perks from a broker, referral payments, and the firm's own products. Where are they disclosed in the brochure?
  5. Who holds my assets? That company is the custodian. Do you or a related person report custody under Item 9, meaning a defined kind of control over client money? How do I get statements, and who sends them?
  6. Who will do the work day to day: the person I meet, a team, or an outside model? Who can place trades?
  7. Does Item 11 show any Yes answers for the firm or the people it supervises? If yes, summarize the event, the date, the outcome, and whether those people still work with clients.
  8. What is the account minimum, and what happens if my balance falls below it?
  9. Which Item 5G services apply to me, such as financial planning or portfolio management? Which are out of scope?
  10. Can I see a sample agreement, Form CRS, and the fee schedule before I sign?

What to look for on Best Investors

Use the firm ADV panel as a checklist before the meeting. It is not a scorecard.

  • Item 5E. Yes boxes name types of pay, such as a percent of assets, hourly, fixed, commissions, performance pay, or other. They do not show your rate.
  • Item 5G. Service boxes show what the firm says it offers. Match them to the work you want.
  • Item 9. A custody Yes means you should ask who holds the assets and how statements arrive. Unclear custody is a warning sign.
  • Item 11. Read each Yes row. A clean panel is what the firm reported. It is not a government clearance. See how to read Item 11.
  • Search. The list is offices near you. The order is not a quality score.
  • IAPD check. If a profile looks wrong or old, open the same CRD on IAPD and use that file.

Common mistakes

  • Hiring on personality and skipping written answers on fees and the duty.
  • Treating "fee-based" as "fee-only" without checking Item 5E for commissions.
  • Ignoring Item 11 because the office looks polished or the assets are large.
  • Assuming the person in the meeting will manage the account.
  • Not knowing who holds the money or who sends statements.
  • Stopping at the Part 1A boxes and never reading the brochure 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 that duty 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 page and scan Item 5E, 5G, 9, and 11. Then open the brochure for fee tables and conflicts. Bring mismatches to the meeting. For example: "Item 5E shows commissions, and your email said fee-only." Use the Form ADV guide and check 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 pay. Item 5E shows categories. The brochure and the 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. It is not about a vault. Get a clear custodian name, a clear path for statements, and a clear answer on whether the adviser can deduct fees or transfer funds.

What if Item 11 has a Yes?

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

Limits

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

The firm filled out Form ADV. We do not audit fees, assets, custody, or Item 11. If the live IAPD filing differs from a page here, use IAPD.

Sources

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