8 Questions to Ask Before Hiring a Financial Advisor

Choosing a financial advisor can have enormous implications for your financial future.

Financial advisors can differ meaningfully in their fees, investment philosophy, tax-planning approach, financial planning services, compensation structure, and potential conflicts of interest. Understanding these differences matters: depending on your circumstances, the choices you make can affect your finances by tens of thousands of dollars each year—and potentially millions of dollars over the course of a lifetime.

Before entrusting someone with your financial future, here are eight questions we believe every investor—particularly retirees and those approaching retirement—should ask.

1. Are You a Fiduciary 100% of the Time?

The word fiduciary matters. A fiduciary financial advisor is required to put your interests ahead of their own when providing advisory services. But simply asking whether someone is a fiduciary may not tell you enough. Some financial professionals operate in multiple capacities and may be subject to different standards depending on the service or recommendation being provided. Ask specifically whether the advisor will act as a fiduciary 100% of the time in your relationship. If the answer is anything other than a clear yes, we believe you should seriously consider looking elsewhere.

The Luminvest Answer: Yes. Luminvest Wealth Management LLC is an independent Registered Investment Adviser, and we act as a fiduciary for our clients at all times. Our job is to provide advice based on what we believe is best for you—not what generates the greatest compensation for us.

2. What Experience and Qualifications Do You Have?

We believe the CERTIFIED FINANCIAL PLANNER™ certification should be a minimum qualification when selecting someone to provide comprehensive financial advice. CFP® professionals must satisfy education, examination, experience, and ethical requirements. An advisor who is serious about the craft of financial planning should be willing to invest in developing and demonstrating that expertise.

Credentials aren't everything, however. Ask how long the advisor has worked with clients, what types of clients they typically serve, and whether they have meaningful experience dealing with circumstances similar to yours.

The Luminvest Answer: Luminvest is led by Trent White, CFP®, JD, LLM, who has worked with high-net-worth and ultra-high-net-worth families for more than a decade. His background includes a law degree from BYU and a Tax LL.M. from Georgetown University with a Certificate in Estate Planning. Prior to founding Luminvest, Trent managed more than $1 billion for approximately 150 ultra-high-net-worth households as part of Vanguard Personal Advisor Services. You can learn more about Trent and the rest of the Luminvest team.

3. How Are You Compensated for Your Services?

You should be able to understand exactly what you're paying your financial advisor. Ask whether the advisor is compensated through an asset-based fee, flat fee, hourly fee, commissions, or some combination of these. Don't be afraid to ask for the answer in dollars, either. If you're investing $2 million, for example, ask, "Approximately how many dollars would I pay your firm each year?" A percentage that sounds small can represent a significant amount of money over a long retirement, so understanding both the services you receive and their cost is essential.

The Luminvest Answer: Luminvest is a fee-only financial advisory firm. Our advisory fee is based on the assets we manage: 0.25% annually on the first $5 million, 0.10% on the next $5 million, and 0.05% on assets above $10 million. For households with less than $1 million under management, we charge a minimum advisory fee of $625 per quarter in lieu of the asset-based fee. Our complete and transparent fee schedule is available on our website.

We believe this structure helps align our interests with those of our clients: when your portfolio grows, our compensation grows in dollar terms; when your portfolio declines, our compensation declines as well. Simply put, we do better when our clients do better.

4. Do You or Your Firm Receive Compensation From Anyone Other Than Me?

This question is related to fees, but it deserves to be asked separately. Some advisors or their firms may receive commissions for selling investments or insurance products, referral fees for directing clients elsewhere, revenue-sharing payments, or other forms of compensation from third parties. These arrangements do not automatically mean that advice is bad, but they can create financial incentives that clients should understand. Ask your advisor a very simple question: "Does anyone other than your clients pay you or your firm?"

The Luminvest Answer: No. 100% of Luminvest’s revenue comes directly from our clients. We do not accept commissions, referral fees, revenue-sharing payments, or other compensation from investment providers or third parties. We believe this structure helps keep our advice focused on one thing: serving our clients’ interests.

5. Do You Have Any Regulatory Disclosures or Complaints?

Trust is essential when you're giving someone access to information about your life savings. Before hiring an advisor, review their professional and regulatory history. Ask directly about customer complaints, regulatory actions, disciplinary matters, or other disclosures—and verify the answer independently. Registered investment advisers provide disclosure information through their Form ADV, while brokers can also be researched through FINRA's BrokerCheck. A disclosure does not necessarily mean someone should be disqualified, but you should understand what happened and be comfortable with the explanation before moving forward.

The Luminvest Answer: No. Luminvest and its advisors have no regulatory disclosures or client complaints to report. We encourage prospective clients to do their homework rather than simply take our word for it. Our regulatory documents, including our Form ADV and Form CRS, are publicly available for review.

6. What Investment Philosophy Do You Follow?

Your advisor should be able to explain their investment philosophy in plain English. Be cautious if the strategy depends heavily on predicting what the stock market will do next, frequently moving in and out of investments, or identifying the next hot stock, sector, or fund. Retirement portfolios may need to last for decades, and we believe a disciplined, diversified investment process is generally more reliable than attempting to predict short-term market movements.

The Luminvest Answer: Our investment philosophy is grounded in the principles of Modern Portfolio Theory and the Efficient Market Hypothesis. Rather than trying to time markets or allowing headlines and emotions to drive investment decisions, we focus on building diversified portfolios appropriate for each client's goals, time horizon, risk tolerance, tax situation, and financial plan.

We gather research and insights from a number of respected sources, with Vanguard's industry-leading research and portfolio models serving as a primary resource in guiding our portfolio construction. Our objective isn't to predict what the market will do next. It's to build an intelligent portfolio designed to help you accomplish your goals through many different market environments.

7. Where Do You Keep My Money, and How Can I See It?

Your financial advisor generally should not be the institution actually holding your investments. Client assets should be held with an established, independent custodian. This separation provides an important layer of protection: your advisor can manage the portfolio according to the authority you've granted, while the custodian independently holds the assets and provides account records and statements. You should also have direct access to your accounts so you can see your balances and holdings without relying solely on reports from your advisor.

The Luminvest Answer: Our clients' assets are safely custodied at Charles Schwab and/or Altruist, independent custodians separate from Luminvest. Clients receive direct account access and statements from their custodian, allowing them to independently view their accounts, holdings, transactions, and balances. Luminvest provides investment management and advice, but your assets remain in accounts held in your name at the custodian.

8. How Often Will We Communicate?

A financial plan shouldn't be something created once and then placed on a shelf. Your life changes, tax laws change, markets change, and retirement often brings a steady stream of decisions. Before hiring an advisor, understand whether communication is proactive or whether you'll primarily hear from the advisor when you initiate contact. Ask how frequently you'll meet, who you'll speak with, and what happens when something comes up between scheduled reviews.

The Luminvest Answer: We don't believe every client needs to fit into the same meeting schedule. Many of our clients prefer a quarterly meeting cadence, while others prefer less frequent formal meetings. We generally believe at least a couple of meaningful check-ins each year are important so that we can review key planning topics, provide updates, and learn about changes in your life.

Just as importantly, you don't have to wait until your next scheduled meeting. We encourage clients to schedule time with us or reach out by email, text, or phone whenever something comes up. Whether you're considering a major purchase, evaluating a tax decision, dealing with an inheritance, or simply wondering whether something you read in the news should affect your portfolio, we'd rather you ask.

The Bottom Line

The right financial advisor should welcome these questions and answer them clearly. Ultimately, you want an advisor with the expertise and incentives to help you make better financial decisions both before and throughout retirement.

At Luminvest Wealth Management, we built our firm around a straightforward idea: investors deserve competent, independent, comprehensive financial advice at a transparent and reasonable cost.

If you're not yet a client and are approaching retirement, already retired, or simply wondering whether you're getting enough value from your current financial advisor, we'd be happy to talk. Schedule a conversation with Luminvest Wealth Management to learn more about how we work and whether we might be a good fit for you.