Episode 34 - 10 Key Questions to Ask When Hiring a Financial Advisor

Choosing a financial advisor is a big decision that can shape your family’s financial future. In this episode of Beyond Budgets®, Deb Meyer breaks down how to evaluate advisors and find the right fit for your unique goals and values. Whether you’re new to financial planning or transitioning to another advisor, this episode equips you with the knowledge and confidence to make an informed choice.

🔑 What You’ll Learn in this Episode:

  • 10 essential questions to ask during your search for a financial advisor.

  • The difference between fee-only, fee-based, and commission-based advisors—and what it means for you.

  • How the fiduciary standard can impact the advice you receive.

  • Key distinctions between financial coaches and financial advisors—and how to decide which you need.

  • The importance of aligning an advisor’s approach with your family’s values.

🎯 Key Takeaways:

  • Trust and transparency are critical—learn how to assess an advisor’s qualifications, ethics, and experience.

  • Understanding compensation structures can help you avoid conflicts of interest.

  • Your relationship with an advisor is personal—find someone who fits your communication style, preferences, and values.

Listen in to Learn More:

  • (01:06) Things to Know When Hiring a Financial Advisor 

  • (05:59) Advisors' Conflict of Interest Risk 

  • (11:00) Ideal Client Niche Focus Discussion 

  • (18:39) Faith-Based Investing and Self-Improvement

  • (24:57) Establishing Long-Term Advisor Compatibility

Full transcript

Deb Meyer (00:01.484)

I'm so excited to talk to you today. I know we're kicking off the month of February and it's an exciting time. It's also one month already into the new year and with that typically comes tax season. So the focus of this episode will not be on taxes. It's going to be on hiring a financial advisor if that's something you're thinking about.

But I do want to just briefly mention we did record episode seven last year with Logan Allec and that's talking all about taxes, tax season, really preparing yourselves well and getting organized as you start that tax preparation process. So please go back and listen to episode 7 with Logan Allec on Your Guide to Tax Filing Success.

And then today's episode is going to be on 10 questions you can ask when you're hiring a financial advisor.

First I'm gonna start with a little bit of history, because I think, you know, you hear the term financial advisor, it's pretty broad and there's a lot of us in different ways, shapes and forms. So according to the President's Council of Economic Advisors, conflicted advice is actually costing America's working families about $17 billion, that's billion with a B, per year in IRAs alone. That's a lot of money.

And what we mean by conflicted advice is that sometimes a person who's holding themselves out as a financial advisor is really a product salesman. They are trying to push a particular product, usually a mutual fund or an annuity or insurance or something like that, where their main form of compensation is based on you buying that position.

There's other financial advisors like myself that are considered fee-only financial advisors. So in our particular case, we're trying to minimize the conflicts of interest because we don't earn any kind of commissions on a particular product recommendation. So just to give it a little bit of historical background here, when the financial services industry first emerged, there were traditional stockbrokers and they recommended those investments to their clients. The broker, which was registered with a broker-dealer,

Deb Meyer (02:26.766)

received a commission and then the client either earned or lost money on that investment, right? Pretty straightforward. And in that case, stockbrokers were salespeople. The more investment products they sold, the more money they had in their own pocket, right? The present financial services industry, you know, we have a couple of new things that have come into light within the last, I don't know, 25, 30 years.

and these are registered investment advisory firms or RIAs for short. So a financial advisor could fall into one of these three camps generally speaking either they're a commission-based broker, they're a fee-only registered investment advisor, or they're a hybrid meaning they can work under both a brokerage that the commission-based broker or under a registered investment advisory firm. So they have the flexibility to move back and forth and

I think one important term to understand in all of this is the fiduciary standard, especially when it comes to selecting a financial advisor. So any CFP professional, Certified Financial PlannerTM, they are going to be following the fiduciary standard at all times. And that basically means they're going to be acting in your best interest. There used to be what's called the suitability standard, and that's typically more lenient. And that's where a lot of traditional brokers lie. They have the suitability standard, but they don't have the fiduciary standard.

Okay, so let's talk about how this relates to financial advisor compensation because I think it's good to hear about this concept in theory, but it's also good to really apply it to our particular industry. So there's a new Code of Ethics and Standards of Conduct that were put into place back in like 2021, early 2022. And that basically means that all Certified Financial PlannerTM professionals, those that hold the CFP trademark designation are required to act as fiduciaries in their client's best interest at all times. Okay. And if advisors don't follow the standards, they could actually lose their CFP(R) license.

Deb Meyer (07:08.93)

So it's really a great win for consumers if you think about that particular code of ethics and standards of conduct that was put into place. Now, there are a lot of different places you can find certified financial planners and I'll link to those in the show notes. Just in general, cfp.net, that's one area. But if you want to focus on working with a fee-only advisor, one that's not commission-based or can't earn any kind of affiliate income, things like that. You might want to consider is NAPFA, and it stands for the National Association of Personal Financial Advisors. Another good organization that I'm part of that's fee-only advisors held to that fiduciary standard is called XY Planning Network. And again, I'm going to link to all of these in the show notes.

There's even one more that's worth mentioning. There's a woman named Sarah Grillo who helps with marketing for financial advisors and she's developed a website really about creating transparency and especially when it comes to pricing transparency for advisors. She has different lists on her website - directories of sorts - that you could go to and see in your particular state what advisory firms are doing from a transparency perspective.

So if they offer flat fees or if they offer hourly services, things like that, she's gonna have that in her directory. Now, fee-based advisors sound a lot like fee only, but they actually operate very differently.

And when I was talking about those three general classes of advisors, either the brokers or the fee only registered investment advisors, the hybrid advisors can accept fees for guidance and investment oversight, but they can also receive commissions on specific products such as annuities, life insurance policies, or loaded mutual funds.

Deb Meyer (09:09.71)

That's the only piece that I have little bit of a hardship with because that could create a conflict of interest, right? If they have the option of going either way, they might be tempted to go more of the high commission based route. So that's why I, as an advisor, have chosen to be fee only, but I'm one of like 2 % in the nation that's a fee only advisor when you look at financial advisors broadly. And...

Sometimes the choice between selling an annuity and earning that more substantial commission or just doing a passive exchange trade of fund, you know, it could be that conflict of interest. And I'm not saying all fee-based advisors or hybrid advisors operate that way. I'm just saying it could create a conflict of interest. So trust is critical. When you think about working with an investment professional, you want to make sure you're working with someone who is trustworthy.

and potentially avoids those conflicts of interest. Okay, now that you have a little bit of background, I think it's important to think about the questions to ask when you're interviewing a financial advisor. We're at towards the beginning of the year, there's a lot of New Year's resolutions around having great financial fitness. And I do think it's important to, before we even go into some of those questions, also just give a quick delineation between financial coaches and financial advisors.

So financial coaches are not in a typical investment advisory firm or even a brokerage firm. They're there to do more accountability around cashflow management. So if you're in a lot of debt and you're struggling to get out of debt, you might hire a financial coach to come up with a game plan on that cashflow spending. They're gonna be checking in with you frequently. They're gonna be helping you move towards those financial goals of cashflow management.

For the people that are already managing cashflow well and they have extra dollars to spend, they're more concerned with maybe taxes and investment opportunities. That's where a financial advisor can really come into place. So I hope that's a good distinction between the two. Financial coaches, again, more frequent meetings, more of that accountability cheerleader type role. And then with financial advisors, you're kind of co-creating that financial plan.

Deb Meyer (11:27.4)

using the goals established for your family, but also really figuring out where some smart strategic decisions can be made around investing, tax mitigation, things like that. Okay, so let's turn to those 10 questions you should ask when hiring a financial advisor. And this list isn't exhaustive. You could ask more questions, but I did look around at a couple of different lists online.

and came up with my own list of 10 that I think are really good to be asking. So, number one, are you held to a fiduciary standard at all times? And again, that goes back to what we talked about first, that fiduciary standard versus the suitability standard. If someone's operating under a suitability standard, they can't honestly answer that question yes, right? They can only answer that question yes if fiduciary, they're acting in your best interest at all times, okay?

And just because they receive a commission doesn't mean they can't be held to the fiduciary standard. There's lots of CFP professionals that receive commissions. It's just, are they held to that fiduciary standard or not? Are they going to act in your best interest? Number two, how are you compensated? So again, if they're a fee-based commission advisor, their main source of compensation is going to be off commissions. If they're a fee only registered investment advisor, like myself,

they're going to be based off of a flat fee or a fee based on the assets of the percentage of assets being managed. And those are going to vary depending upon what RIA structure they have. So in my particular case in Worthy Nest, we have two different structures to support different kinds of families. We have some families that are starting out with financial planning and just need some foundational concepts. So they're on more of a flat fee structure.

And then we have other families that are closer to retirement age or already retired where they have substantial assets to manage outside of their traditional employer sponsored plans. And for those cases, we actually switched to an asset based fee knowing that we're doing a lot more on the investing side with investment management more heavily skewed in those retirement years.

Deb Meyer (13:46.958)

In the case of my firm, we're looking at compensation in one of two ways, but in both cases, they're very transparent fees that I'm not gonna be earning something on the side beyond what I'm telling you I'm earning. All right, so another question, number three, who is your ideal client? Do you have other clients like me? You know, if you go to a website and you see that they only work with women in tech, for example, and you are a man in

accounting, probably not a good match, right? But if you see that they generally appeal to everyone, right? If they don't have any kind of niche focus, it might be a bigger firm that they're at, right? So they can serve a lot of wide variety of families and structures. Generally speaking, I think it's better if you go to a place where you will feel welcome and where the vast majority of the clients are already similar to you, right?

So when I think about that for Worthy Nest, we work with a lot of Christian and Catholic parents and that's kind of our niche focus. Now, yes, I have some clients that are not Catholic or Christian. I also have some, just a handful of clients that are Catholic or Christian, but not parents, at least at this moment. So those are the kind of situations where it might be a little bit one-off there, but generally speaking, most of the families I work with are married couples.

with either Catholic or Christian and they want to express those values through the investing and financial decisions they're making. All right, so question number four, how long have you been practicing? And please tell me more about your experience and your qualifications. I think again, a lot of this could be researched ahead of time. If you go to their company website, you should be able to find out some of these things. And really when you're asking these questions, if you already kind of

know the answers, you can be a little more skeptical if they answer something that's not consistent with what's listed on their website. For a lot of financial advisors, if they don't have a website, it would be pretty rare. Now, there might be some situations where you got a referral from a friend or something like that, and maybe they just don't have as much of an online presence. They're more word of mouth. So in those situations, obviously, you're going to have to be

Deb Meyer (16:13.002)

hearing their answers for the first time, but for a lot of things you can do some research early on on the website and kind of see if this is even worth your time in setting up a consultation.

All right. So I guess I'll go through and answer some of these questions as I'm coming along the way. So I've personally been practicing. I started my career at Deloitte tax in 2004 and it's now 2025. So I've been doing this in some capacity tax and or financial advisory since for over 20 years now. And they've been a CPA since 2006 and got my certified financial planner designation in 2009. So.

It's been a long time of doing investment advisory and financial advisory work and I love it. It's my calling, real passion. Okay, number five for the questions is have you ever been publicly disciplined for unethical actions? And that's an important piece that again, you could do a little more digging. There's what's called a form 80V where each advisory firm needs to complete.

those at least on an annual basis they have form 80 v part one and form 80 v part two. So you should be able to see some disciplinary disclosures through like the broker lookup on the SEC website. But again it's something good to be asking to see like how honest someone is about their history and in my case I have nothing to report so yeah you won't find any disclosures on me.

All right, let's take a quick break. I know we have 10 questions in total. We're through five of those questions. I just encourage you, if you're listening to the podcast as a fairly new listener and you haven't yet checked out our website, we do have the worthiness.com slash podcast where we show all of the different episodes already recorded. And we also have a download available there.

Deb Meyer (18:12.806)

We actually, we technically have two downloads. One is around some of the top money myths for parents. And then another is more around communicating well with your spouse. So I had Ryan Corl back on an episode that was released right around Thanksgiving. And he was talking about, it would be great to have a resource on.

is some of the questions to be asking your spouse during financial check-ins. So I created that as well. So if you sign up for the email list, you'll get both of those free resources and then emails from me on Fridays, just around financial advisory topics or some of these podcast releases. Okay, end of break. Let's move on to question number six. What is your financial planning and investment process?

And again, depending on what type of advisor you're working with, they might not be very financial planning centric. It's usually those family RIAs that are very financial planning centric and really go through the CFP board sets a process that's very clearly laid out of how you need to go about the financial planning process. In our case, we take that same financial planning process from the CFP board, but we also tweak it.

to really hone in on values because values are a big part of Worthy Nest and really identifying those core values upfront, I think does help in the planning process as you're going through it in a little more detail later. So, and then from an investment process, I'd be happy to go through that in a little more detail if we were to have a one-on-one consult, but I don't wanna make this episode way too long.

But I will say we do have two different types of portfolios. One that's heavily skewed towards faith-based, or not heavily skewed, it's entirely faith-based. So biblically responsible funds or socially responsible funds. And then we also have a more traditional portfolio that clients can invest in if they don't have those Christian or Catholic values they're trying to express.

Deb Meyer (20:20.47)

Okay, number seven, can you explain the concept of active versus passive investing? And the reason I include this is because again, you're gonna find a wide variety of how different advisors work in terms of their investment philosophy. And with active investing, you're actually looking at mutual funds that, you know, they have these managers who are making the decisions.

on a proactive basis to either keep or expel a position from their portfolio. With active managers, a lot of them will have a smaller concentration of stocks and they might be more expensive from a fee perspective. Again, that's not a fee that's getting passed on to me as an advisor, it's just a fee internally for their expenses.

So even like when I was describing our faith-based portfolio because it's more active management and they're taking more of a stake in which companies they want to have, that's going to be typically a more expensive portfolio than a passive portfolio that's more traditional in nature and doesn't have as many of those screens. And with passive investing, if you think purely in terms of exchange trade of funds,

A place like Vanguard is a good example of a big passive investor. And that could be something where an advisor doesn't work for Vanguard, but they put clients in Vanguard positions because they believe in the passive strategy. So again, those are two different distinctions and any investment advisor should be able to explain that pretty easily. All right. Number eight, do you own the same investment products that you'll recommend to me?

And I think this is an important question because at least from my perspective, if I'm recommending something to clients, but I'm not invested in it myself, there's a little bit of hypocrisy there, right? If I'm saying, yeah, this is a great position and you should really get into it, but I'm not willing to have some of my skin in the game, I don't feel good about that. So personally speaking, when we created that faith-based portfolio,

Deb Meyer (22:36.086)

I changed our family investment accounts and switched it all over into that faith-based portfolio right away. Now I have some clients that are Christian or Catholic and they want to express their faith, but they were already in more of a traditional portfolio and it just didn't make sense for them to be switching, especially from a tax consequence standpoint. So in those situations, we are deciding, okay,

on a case by case basis, does it make sense to be shifting over? But for new clients, if they want to express those values, yeah, we're getting them into that faith-based portfolio. I know exactly how the portfolio is doing because I'm invested in it as well. Okay, number nine would be how do you invest in yourself? And I think this is important because for a lot of advisors, especially if we've been doing this for a long time,

We can get a little not lazy, there are always new things to learn, but there are also a lot of things that can stay similar, right? Like the investment portfolios could stay very similar for quite a long time period because we don't want to make rash decisions on moving in or out of investments based on what the market happens to be doing.

So for me personally, I love learning. That's my top strength. I have like quite a few designations behind my name because of it. But in order to maintain those designations, I have to actually do a lot of continuing education every year. just as an example for me personally, I have the CPA license, which requires 40 hours per year of continuing education just in accounting and tax type work.

For the CFP designation, Certified Financial PlannerTM, I have additional continuing education hours I have to meet every two years. Being part of NAPFA, that fee-only advisors group, I have additional education hours I have to meet through them. So me personally, I have way more continuing education hours than probably a lot of other advisors, but I enjoy it and it...

Deb Meyer (24:49.73)

helps add value to my clients at the end of the day because anything I'm learning in those classes, I'm taking some of those concepts and trying to really apply them to those client situations. All right, and last, I love this question, why did you choose this work? Or in the case of advisors who really feel called, why did it choose you, right? And I think for me, this question's a fun one because I really have enjoyed

Even when I was a little girl, I was reading Money Magazine for fun in middle school. No joke. I know it's nerdy to admit, but it's the truth. I guess part of what I grew up with, like, well, I've shared a little bit of this before, but we moved around a lot when I was young and there was always this sense of instability when we were moving or when my dad was out of work and we were trying to get him a new job.

So I just really wanted something stable. And what I saw in each of those moves, at least at the time, and this was, you know, as a pretty young kid, my mom as a CPA, as an accountant, she was always able to get a job wherever we moved. And even once we decided to stay in Wisconsin when I was fourth grade and then on through high school, my dad did lose his job again for like a year and a half. And my mom was able to.

financially support us during that time because she had her job as an accountant. So I think for me it was part of just that I guess certainty aspect of it of like, okay, if I go into a career field that's math oriented or money oriented, I might have some more stability than what my dad had to experience being in manufacturing. And I guess that's part of why I

went down this career path, but I actually started in accounting and tax. I worked for Deloitte Tax for two years and then I realized pretty quickly there, even though there was some promising opportunities going forward at Deloitte and it being a big four public accounting company, it was a very respectable position. I just didn't feel like I was in a place where I could really help people make a difference in their lives going forward.

Deb Meyer (27:11.638)

I was doing a lot of historical tax compliance work. And then I got to work actually with a group of Anheuser-Busch executives on some of the financial planning aspects. And that was so fun for me at Deloitte that I was like, if I can do more proactive planning, why shouldn't I do this full time, right? So that's actually why I made the move out of public accounting and into investment management. And I've been.

doing investment management since 2006. I worked for a multi-family office and then started working as shortly after that, after leaving that. So it's been a fun journey and I really, I just get real pleasure from helping make a difference in people's futures. All right, so I hope that's helpful as you think about some of those questions. And again, you don't have to ask every single one of these questions if you get an initial meeting with an advisor, but I do think it's a good, you know, point of comparison that will hopefully help inform your decision.

My encouragement to you would be to, you know, maybe talk to a few different advisors so you can get a sense of what they're like in person. What you see on the website or what you hear might not be how they actually show up in person. So just making sure you have that match. And it's kind of like dating if you think about it. Like sometimes you find Mr. or Ms. right away and other times you have to have a few not-so-fun experiences before you find that right person. So finding an advisor who's actually attuned to your needs does take time and you might have to go on a couple of bad dates before you find the love of your life.

In closing, I just want to say it does come down to fit. think you're going to know based on you and if you're with your spouse figuring out, okay, what kind of structure, what kind of cadence would we have if we are to work together? And this might be something where, you you have an initial meeting with the advisor, you feel comfortable with some of their answers to these preliminary questions, but then you want to go and talk to them a little more deeper, better understand like how often you'll be meeting with the advisor, if those meetings are going to be in person or virtual, how quickly that advisor might respond to emails or phone calls. Here's another important distinction: are you going to be handed off to some other advisor? Like the person that you're meeting with today, are they the person you're going to be working with for a long time? Or are they going to be transitioning you to maybe someone less experienced on their team?

Try to get a feel for how comfortable you are with your answers. If you really want to only meet in person, but this person says, hey, we only do in-person meetings once a year and all the rest are virtual, then it might not be a good fit. But if you're open to having virtual meetings or at least phone calls as check-ins, that can be a really great fit.

And then if you think about your personality type, right? If you're a type A person and you want an immediate response within an hour and your advisor says, hey, it usually takes me 24 to 48 hours to respond, probably not going to be the best match, right? You're going to be disappointed every time you reach out and they're not getting back to you right away. And they think they're doing nothing wrong because that's just what their normal cadence is. just making sure there's expectations around you and them upfront can really help make sure it's a good relationship for a long time.

If you think about technology, how much are they incorporating technology into their practice? I will say as an advisor myself, we do incorporate quite a bit of technology into our practice. We leverage a lot of online tools. We work with a custodian that's very tech-forward.

In our case, if you're not as tech-savvy or you're not as comfortable with tech, it may not be the best fit to work together. But if you are really comfortable with that and you're trying to work with someone who's still stuck in everything paper, that could be a mismatch. So again, you're going to want to better understand where I am at on the spectrum and how comfortable I feel with some of these things. And every advisor might be willing to make accommodations here and there.

Deb Meyer (31:39.406)

But generally speaking, it's going to flow easier as a relationship if you guys are both on the same page. And I guess the other thing to point out, if you're married, just focus on how both you and your spouse like that advisor, right? You might have a good relationship with that advisor yourself, but if your spouse is totally tuning that advisor out, probably not going to be the best fit if you want to keep a happy marriage.

And for me, when I'm working with married couples, I want both spouses to be there for the meetings, even if one person takes more of a front role in some of the financial decision-making. OK. If you have additional questions or there's other things that you're thinking about, hey, I want to look at hiring a financial advisor, but I'm just not sure, feel free to send me an email, info@worthynest.com.

I’d be happy to answer additional questions or give you different thought process. But I do have a little article that was written a couple of years ago on 10 questions to ask when hiring a financial advisor. So I'll link to that in the show notes as well if you'd rather have a readable version of some of these questions. OK, I hope you're doing well. And feel free to also reach out and contact me for an initial consult. Thanks!

Deb MeyerWorthyNest LLCfamily finance, beyond budgets, financial advisor, commission-based brokers, fee-only RIAs, fiduciary standard, Certified Financial Planner, transparency, ethics, NAPFA, XY Planning Network, WorthyNest, Christian and Catholic parents, fee structures, investment management, core values, selection process, financial planning, investment process, personal investments, ongoing education, stability, satisfaction, dating, ideal match, financial advisor compensation, hire a financial advisorComment