What to Ask a Financial Advisor Rochester NY Before You Hire for Your Business

Starting and growing your business can be exciting, but remember that you don’t have to do it all alone. A financial advisor will provide you with insight and direction when it comes to your business taxes, investments, and finances.

Finding a financial advisor that puts your interests ahead of their own is crucial. Here are some of the questions that you should ask a Rochester, NY financial advisor before you hire them to help you out with your business:

1. Are you a financial fiduciary?

Financial fiduciaries, such as investment adviser representatives or IARs and registered investment advisers or RIAs, are held to higher ethical standards. Your interests always come before theirs. Financial advisors that are not fiduciaries, such as stock brokers, don’t necessarily have the same legal obligation to act in your interest.

A straightforward way to ask if an advisor is a financial fiduciary is to just ask. They should have no problem putting their claim in writing on their company letterhead. Be wary of those who refuse to provide you with written proof.

2. Do you hold any active certifications or designations?

A financial advisor can have several designations and certifications. Here are four of the major ones:

  • CFP or Certified Financial Planner – A CFP designation is generally recognized as the gold standard in the financial services industry. A CFP has completed an extensive course, has several years of experience, and has passed an intensive 6-hour exam.
  • CPA or Certified Public Accountant – CPAs undergo rigorous testing to earn the designation, which is considered as the oldest and most established financial credential in many countries around the world. Most small business owners hire firms such as Davie Kaplan CPAs to help them with advance tax planning.
  • ChFC or Chartered Financial Consultant – This designation is granted to those who have completed 7 required courses and 2 electives, as well as 3 years of experience in financial services.
  • CFA or Chartered Financial Analyst – Holders of this designation have passed 3 comprehensive tests regarding investment analysis. CFA holders often become portfolio managers or analysts for financial institutions.

No matter which one of these your financial advisor has, always make sure that their credentials are legitimate and current. Verify the validity with the appropriate licensing agency or organization.

3. What services do you or your firm provide?

Remember that financial advisors do tend to specialize. For instance, some of them can only provide assistance and advice on investments, while others may deal only with financial planning or retirement concerns.

Choose an advisor or a firm that offers the services that you are looking for. In particular, hire a financial advisor that specializes in working with business owners and entrepreneurs.

4. How are you compensated for your advice and services?

There are 3 ways that a financial advisor is compensated for their services. These are the following:

  • Commission-based advisors are those who are often affiliated with large financial institutions and earn their fees based on the financial products they sell. As a rule, you want to avoid commission-based advisors because they have a greater incentive to push a specific type of asset or product when they are getting a cut from your investment.
  • Fee-based advisors are those who earn a percentage of your revenue or the asset that they are managing for you. However, like commission-based advisors, they are typically affiliated with brokers and agents, and may pressure you into selecting products from which they will earn a commission.
  • Fee-only advisors earn money through hourly rates or flat fees. If this is your first time hiring an advisor, most experts recommend choosing a fee-only advisor because they don’t receive commissions from product sales. They are motivated to get your finances right so that they can grow their practice.

5. Do you have any convictions or are there any ethical complaints filed against you?

Avoid financial advisors that have legal or ethical marks against them. Here are some examples:

  • Bankruptcies
  • Criminal charges
  • Unpaid liens
  • Disciplinary, administrative, and criminal investigations

Remember that while financial advisors are legally obligated to disclose ongoing and previous disciplinary actions, as well as any conflicts of interest, you should also do your own legwork to avoid making the wrong decision.


Your financial advisor will be one of the most crucial people that you bring into your business. They help you become more accountable, and they can offer valuable input and recommendations into the more complex aspects of your business. The right financial advisor will help you navigate the bumpy road to a successful business.