In an excellent piece from Money, headlined Five Questions To Ask When You’re Choosing A Financial Adviser, Sallie Krawcheck CEO of ELLEVEST writes about a recent survey of 1,000 women and 1,000 men about money. The survey found that women are way less satisfied with their finances. Only 47% of women say they know how to achieve their financial goals vs. 64% of men.

Where can you turn for help?


By Kevin McCormack

You can get financial advice
– on saving, investing, retirement planning and estate planning- from a human, a team of humans, a digital platform or all of the above. Regardless of which you choose, you want an adviser who gets you. Start with these five questions:

  1. Are you a fiduciary? You are looking for a yes! A fiduciary is legally required to act in the best interest of the client, always put the client’s interests first, and be transparent about any conflicts. (BEST INTEREST STANDARD OF CARE). Seems like a no brainer but some advisers follow something called the “suitability standard”- meaning they are required to recommend investments that are appropriate, but not necessarily best for you. The fiduciary question will get you to an adviser who puts you
  2. What will your services cost me? Sounds straight-forward, but you’ve got to ask upfront. Some advisers charge more than you’d expect, and not all of them are required to be 100% transparent about their fees. One big red flag: advisers who claim to be free. Believe me, nothing in life is free. “Free”, for instance may mean they’re putting you in a fund that’s run by their own firm (and thus are earning money from that). Or they may be directing trades from your account to a particular company. Look for management fees of 0.50% or less from a digital adviser, and 1% or less for the human touch.
  3. What services do you provide? Find out what you are getting for your money. Ask them: Do they give you a customized mix of stock and bonds? Do they offer automatic rebalancing? Will you get specific investment recommendations? Ask human advisers how often you’ll hear from them – and how. How easy will it be to meet in person for actual face time when you want to?
  4. What’s your investing philosophy? Another big red flag? The adviser who is all about “beating” the stock market. Maybe you’ll find the one who does that kind of “active investing” perfectly, but if his or her name isn’t Warren Buffet think again. A well-diversified, low cost investment portfolio is a better bet than stock picking. Investing isn’t a game to be won. At the end of the day, it’s a way to achieve your big goals, like buying that home, starting that business, and retiring on your own terms.
  5. Describe your investing powers. Investment advisers need to articulate in plain English how they create a strategy for you. If it’s all pie charts and investing jargon, that’s another red flag (unless you’re into that). So get them to tell you how they work with clients. See if they start by asking what your investing and life goals are. Are they looking at your entire financial picture, or just focusing on what you can invest? If your adviser brings up your feelings about risk, here’s a hint: It should not be all on you to know exactly how much risk you should take with your money. Your feeling about risk will change depending on a lot of things and your adviser should help you figure that all out. Then there are the investments themselves. How do they choose funds for you? And how do they choose funds in general? Are they looking at performance only, or are they taking you into account? Advisers base investment portfolios partly around projections about your income and life expectancy. For women, that means lower average earnings, longer career breaks, and longer life spans, to name just a few. Does your adviser bring that up? If not, be prepared to get a portfolio built for a man. And those never fit.