Almost anyone can call themselves a "financial advisor" — the title itself is essentially unregulated. What actually matters sits underneath the title: how the person is paid, what legal duty they owe you, and whether they'll explain both in plain English without flinching. A good advisor welcomes these questions. Evasiveness is your answer.
Question 1: "Are you a fiduciary — always?"
A fiduciary is legally required to act in your best interest. The alternative standard, suitability, only requires recommendations to be "suitable" — which leaves room to favor products that pay the advisor more.
Some advisors are dually registered: fiduciaries when giving planning advice, but working under the looser standard when selling certain products. That's not automatically bad — but you deserve to know which hat they're wearing for each recommendation. Ask: "Are you acting as a fiduciary on everything you recommend to me? Will you state that in writing?"
Question 2: "How exactly do you get paid?"
Every compensation model carries incentives. None is automatically wrong — but each pulls in a direction you should understand:
| Model | How it works | Built-in incentive to watch |
|---|---|---|
| Fee-only (AUM) | A percentage of assets managed, commonly around 1%/year | Prefers you keep assets under management (e.g., may discourage paying off a mortgage from the portfolio) |
| Fee-only (flat/hourly) | A set fee for a plan, or an hourly rate | Fewest product conflicts; you must act on the advice yourself |
| Commission-based | Paid by product providers when you buy insurance or investments | Earns more when you buy, and more for some products than others |
| Fee-based (hybrid) | Mix of fees and commissions | Both sets of incentives — ask which applies to each recommendation |
The test isn't which model — it's whether the advisor answers instantly, specifically, and in dollars. "What would I pay you, in total, in a typical year — and does anyone else pay you because of my accounts?" should not produce a fog of words.
Question 3: "What are my all-in costs?"
The advisor's fee is only one layer. Underneath may sit fund expense ratios, platform fees, trading costs, and — inside some insurance products — surrender charges that lock your money up for years. Ask for the total cost of the recommendation, not just the advisory fee. Small-sounding percentages compound into large sums over decades.
Question 4: "What are your credentials and background?"
- Designations like CFP® (financial planning) and CFA (investments) require real coursework, exams, and ethics obligations — many other letter-combinations don't.
- Verify, don't trust: every advisor's licensing and disciplinary history is public. Check brokercheck.finra.org and the SEC's adviserinfo.sec.gov — it takes two minutes.
- Ask who they typically serve. An advisor whose clients look like you will know your problems cold.
Question 5: "What happens after I sign?"
Good advice isn't a transaction; it's a relationship. Ask how often you'll meet, who you'll actually talk to, what a review covers, and how they'll handle it when your life changes. Vague answers here predict a relationship where you hear from them once — at signing.
Where I stand on all of this
Transparency is the standard I'm asking you to hold me to. I'm a licensed advisor affiliated with Lucas Retirement Group as my RIA, and I offer insurance products through American Senior Benefits — which means, depending on what you need, my compensation may come through planning fees or through commissions on products. I'll tell you which, in plain terms, before you commit to anything — and the first conversation is always free, with no obligation. If what you need isn't something I'm the right fit for, I'll tell you that too.
Ask about fiduciary duty, compensation, all-in costs, credentials, and ongoing service — and expect direct answers. Any advisor worth hiring will respect you more for asking.