Everyone wants to work with a financial advisor that’s right for them. But how do you know what advisor is right for you?

You’re entrusting this individual with your financial well-being, so you should feel comfortable asking the tough questions. Some of the questions that follow may seem too modest, and others too intrusive, but you have the right to know the answers. Here are four important questions to ask your financial advisor:

1. Who is your ideal client and how many clients do you work with?

No one advisor can be an expert in everything. Most advisors have an area or two of expertise. Whether they have the knowledge to handle larger high-net-worth clients or deeply understand the cash flow needs of a non-profit, most advisors have a specialty. Be sure that specialty fits your needs, and if not, make sure to work with someone who collaborates with a team of individuals so you are getting the right advice for your situation.

It is also important that you understand the number of clients who work with your advisor. Some advisors are deeply entrenched in their relationships and can only handle a small number of clients. Others will have a large number of relationships. There is no right or wrong answer here. It is important that you ask and understand if your advisor is providing the right service experience for your specific needs.

2. Is your financial professional required to act in your best interest?

Unlike other financial professionals you may have experience working with, registered investment advisors are required to act as a fiduciary. What does this mean? A fiduciary is legally required to provide advice that is in the investor’s best interest. They must avoid conflicts of interest, confirm that the information provided is precise and exhaustive, and ensure that they do not use client assets for personal benefit.

3. What will happen to my account if you change firms or retire?

Everyone’s situation is unique, and their financial solutions should be, too. Gaining a proper understanding of a client’s hopes and dreams allows advisors to create better solutions, but what happens if that advisor leaves or retires?

There are a number of reasons why an advisor may leave a firm. If your advisor leaves the firm; your account could be transitioned to another advisor at the firm that you may not have any experience with at all. In extreme cases, the advisor’s client relationships could even be sold to another firm.

Ask if your advisor works on his or her own, or if they use a team-based structure. Some firms choose to provide clients access to a team of financial consultants, believing that a group of people working together on your needs leads to better, more holistic solutions. And it also means that even if your advisor leaves, you’ll still have a familiar team who understands your unique needs.

4. Does your firm have an integrated investment-planning approach?

Different financial organizations manage their investment process in different ways. Some firms use in-house research staff and proprietary investment strategies. Others place client portfolios into external investment products that they deem best-in-class.

At first glance, it would appear that selecting best-in-class funds is an obvious choice. In practice, this type of best-in-class approach might not work as well as you would think. Investment managers who fail to have disciplined research processes tend to see their strong performance come and go over time. Worse still, this type of strategy typically has a multi-tiered fee structure. This means that both the financial advisor and the fund managers each have their own fees, leading to much higher costs for you.

Firms that pair in-house investment solutions with their holistic planning capabilities and advice have the potential to avoid some of the pitfalls outlined above. Be sure to fully understand the strategies utilized and the general philosophy of the firm.

While these questions are not an exhaustive list, they should provide you with some initial guidance as you search for a financial advisor or evaluate your current advisor.

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