The stakes are high for women building wealth. On the line: living the life you want on your terms. To change careers. To take that risk and start a business. To buy the vacation home or leave that bad relationship or quit that toxic job.
That’s why it’s crucial to work with a financial advisor who's knowledgeable and cares about what’s important to you. It’s the difference between “fine” and the financial control women deserve.
Here are eight questions to ask a financial advisor in an interview or during a discovery meeting to help you know if they’re the best fit. We’ve included the answers you want to hear *and* red flags to watch out for so you can feel confident and comfortable about working together to help meet your needs and achieve your goals.
But first, what is a financial advisor?
A financial advisor is someone who offers you personalized financial advice to help hit your financial goals and build your wealth. They often coordinate with your other financial pros — think your accountant, your trust and estate attorney, your life insurance agent — to help make sure all parts of your financial life are working together.
Financial advisors specialize in developing, implementing, and maintaining an investment plan that supports your financial goals through all of life’s changes (and the market’s changes, too). But not all financial advisors specialize in creating investment plans that take women’s specific needs into account. The implications of that can be costly, both in dollars and cents and the impact your wealth makes (or doesn’t make) on the causes important to you, like affordable housing, climate change, or supporting women.
Why does finding the right financial advisor matter for women?
Wealth affects women differently than men. It’s more challenging for us to gain wealth and easier for us to lose it.
More women tend to take career breaks to care for aging parents and young kids. Our earning power stalls earlier. Our businesses are less likely to get funded. Our health care and caregiving costs are generally higher. We’re saving less for our retirements despite our longer lifespans. And, we’re investing less across the board (even though research shows women are better investors than men).
Our different realities, priorities, and goals all require different financial considerations. But the traditional financial industry — built by men, for men — simply doesn’t account for women’s differences, and so it doesn’t work as well for us. How could it when only 32% of financial advisors in the US are women?
You deserve a financial plan that considers your life, your goals, and your values. That’s why it’s crucial to work with a financial advisor who understands the uneven playing field and has motivation to do more.
How do I find the best financial advisor for my situation?
To find the right financial advisor — one that fully supports women and reflects women and their experiences, aka you — it helps to approach your search with the aim of establishing and building a relationship, not merely securing a service.
Once you’ve done some research, made your short list, and booked an intro call, use these eight questions to determine if they’re the right choice for you. From the basics, like checking credentials and understanding costs, to the personal, like learning about their financial values and areas of experience.
8 questions to ask a financial advisor
What are your qualifications?
The answer you want to hear: That they’re a fiduciary, someone who’s required to put their clients’ best interests above their own when they give out financial advice. An easy way to identify if they’re a fiduciary? Ask the question. (If you already know they’re an RIA (registered investment advisor), that means they’re held to fiduciary standards.)
They should have a Form ADV filed, too. This is a mandatory disclosure document that details their services and history, including any disciplinary action against them. It’s free for any prospective client to check (and you absolutely should).
The red flags: That they’re not held to fiduciary standards. Surprisingly, not all financial professionals are required to have a deep level of experience or abide by high ethical standards.
What are your core values (and how are they reflected in your work?)
The answer you want to hear: That their core values are aligned with your own. When you use your core beliefs (the principles that are most important to you) to guide your financial decisions, you make more intentional money choices. The same goes for your financial advisor, too. It’s valuable for you both to be on the same page for you to trust them to make the most meaningful, beneficial financial decisions for you.
The red flags: That their core values are incompatible with your own. It’s important to consider how any differences might play out in your relationship (and your financial outcome). Or say you value “balance” and they value “achievement.” They might not have the same focus on mitigating risk under the allure of high reward, even if the data shows it’s not worth it. None of this makes them a bad financial advisor. It just doesn’t make them a good fit for you.
What services are included?
The answer you want to hear: That they come to you with ideas that work for your financial needs, goals, and life. The very least they should be hands-on with is:
Investment management. They monitor and adjust your investments for you as your life, financial goals, and the markets change.
Personalized planning. They’re with you through every step of the process to help you make a custom financial plan based on your specific goals.
Navigating change. They offer realistic and personalized financial guidance to support all of your meaningful decisions.
Coordinating with a team. They coordinate with the rest of your financial team to make all parts of your financial life work together to help achieve your goals.
Legacy planning. They set you up to control and have peace of mind over how your estate will be managed by your next generation.
The red flags: That they favor one-size-fits-all solutions, or solutions that favor them, not you.
How are you compensated?
The answer you want to hear: That their compensation model minimizes conflicts of interest so that they can always put you first. And, that there are no surprise costs, so you always know what you’re paying for.
Your all-in cost should be transparent. So ask them to lay out and explain all the different types of fees you might be charged if you invest with them.
The red flags: That they’re being pushy about products or services that aren’t right for you, but may earn them a greater commission or fee. There’s a big difference between making thoughtful, strategic suggestions that work for your life and being a hardliner. Or the flip side of that: You feel like you’re having to pull teeth to find out the cost of their services. They shouldn’t be wishy-washy about compensation or downplay the importance of you reading (and understanding) the fine print. If you don’t think you’re paying a fee, contact them immediately — there’s a cost somewhere.
What's communication like (and with whom)?
The answer you want to hear: That they actively listen and create space for real conversations to understand your financial needs and goals.
The red flags: That their availability is limited. You deserve to have a financial advisor who’s interested in you — someone who cares. And if something big happens in your life, you should feel comfortable enough to give them a call, shoot them an email, or send them a text. You should trust that they’ll be there for you.
What’s your investment philosophy?
The answer you want to hear: That they value and are committed to the same approach to wealth management as you are, no matter the condition of the markets. After all, their investment philosophy is their decision-making north star. It’s what guides their whole approach to selecting and managing investments, and sticking to it is what ultimately helps them (you) achieve long-term success.
For example, Ellevest’s Wealth Management was founded by women, for women on the belief that clients can invest to achieve both financial and social returns. We take an intentional, transparent approach to wealth management and use personalized solutions that are, above all, client-centered and collaborative — for anyone looking for wealth management services, regardless of their gender identity.
We put women first. We use a gender-lens investing approach to combine robust investment principles with investments designed to support and advance women.
We start with your goals. We learn about you (or you and your family, or your organization), identify your goals, and build your investment strategy accordingly.
We use a holistic, tax-optimized approach. We manage your assets considering your entire portfolio, not just the assets you hold with us — all with your tax situation in mind.
We invest in alternatives. Where appropriate, we use private alternative investments to provide portfolio diversification and drive tangible positive impact.
A financial advisor’s investment philosophy should sync up nicely with your financial needs, including your goals, time horizon, risk capacity, and other considerations important to you.
The red flags: That they don’t have a strong investment philosophy and instead, try to pick winners, time the market, over-trade, or place clients in particular investment products to make additional fees. What they do, when they do it, and why they do it should all make sense to you — and ultimately, center you, not their adrenaline or bank account. Another red flag: that their sustainable investment efforts aren’t as sustainable as they appeared to be. Unfortunately, investment greenwashing is an issue.
What does your company or leadership team look like?
The answer you want to hear: That their team is diverse — and that their approach to DEI is sustainably ingrained into the company culture.
Allow us to state the obvious: Diverse teams are more innovative and creative. If a team member has traits in common with you, they’re just more likely to get you because they’ve been there. Research shows that when at least one member of a team has traits in common with a client, the entire team better understands that client. And, a team with a member who shares a client’s ethnicity is 152% likelier (!) than another team to understand that client. The bottom line is that greater diversity allows a company to better understand and meet the needs of its customers. That’s the kind of support you deserve.
And think about it this way: If diversity is important to you, then that’s exactly the kind of team you want to support, too. Every dollar we spend or invest has an impact, whether we know the impact or not. Why not use yours to support a company whose team is more likely to endorse ideas of their colleagues who are women, people of color, and LGBTQIA+ than a team who isn’t diverse?
The red flags: That they say they’re all about diversity, but the people who lead the firm, or those who look out for their client’s best interests, all look the same. Or, they don’t look the same but also don’t get paid the same. You can ask point blank about how their company pays women and / or people of color versus white men. They shouldn’t hesitate with their answer.
How many clients do you have like me?
The answer you want to hear: That your background, goals, preferences, and financial situation are familiar to them. For a financial advisor to meet you where you are, they need to be familiar with where you are (and where you’ve been). Take Ellevest’s financial advisors: They understand women’s lives on a deep level, being women themselves.
After you’ve reflected on their answers, check in with yourself to determine if you’re in a place to be their ideal client. Are you ready to be open about your finances, accept feedback, and take action? You should want to commit to them (and your plan) as much as they commit to you.
The red flags: That it’s someone nothing like you. It’s worth repeating: The financial industry wasn’t built with women in mind. And women are tired of being overlooked, talked down to, patronized, and trivialized in this space. Don’t waste any more time, energy, and resources — like your actual money — with someone who's unable to consider your needs holistically and without judgment.
Get financially prepared : If you would like to learn more about Ellevest Wealth Management, how we help our clients build their wealth, and our values-aligned investment strategy, you can schedule a call with us here.