Is My Financial Advisor Good? 8 Questions to Find Out Right Now

Last updated: May 2026 — Reviewed for current Reg BI guidance and SEC verification process.

“Is my financial advisor good?” It’s a question most people think but never actually investigate. They assume that if their portfolio is growing, everything must be fine. But that’s like assuming a doctor is competent simply because you haven’t gotten worse.

A good financial advisor does far more than manage your investments. They minimize your taxes, protect you from risk, plan for major life events, and build a strategy that compounds your wealth over decades. If yours isn’t doing all of that — you may be paying for a service you’re not fully receiving.

The 8 questions below are the most diagnostic checks you can run on your own. None of them require a financial degree. All of them require honesty.

Quick answer: A good financial advisor can clearly explain what they do for you, charges transparent fees under 1.5% all-in, has reviewed your tax strategy, has given you a written financial plan, can show your performance vs an appropriate benchmark, contacts you proactively, understands your full financial picture, and would be someone you’d refer to family without hesitation. If 2 or more of these are missing, the relationship needs a hard look.

8 Questions to Know If Your Financial Advisor Is Good

1. Can You Explain What They’re Actually Doing for You?

Not in vague terms — specifically. Can you explain:

• How your money is invested across stocks, bonds, and other asset classes?
• Why those particular investments were chosen for you (not for the average client)?
• What the strategy is for the next 5-10 years?
• What triggers a change in strategy?

If you can’t answer these clearly, your advisor hasn’t fulfilled their most basic communication responsibility. The test isn’t whether they explained it once — it’s whether you understand it now, in your own words, well enough to repeat it to your spouse.

When clients can’t explain what their advisor does, it’s almost always one of two things: the advisor uses jargon as a substitute for clarity, or the strategy is genuinely thin and there isn’t much to explain. Either way, you’re not getting your money’s worth.

2. Do You Know Exactly What You’re Paying?

Add up every cost you incur:

• Advisory fee (typically 0.50%–1.25% of assets under management annually)
• Fund expense ratios (the underlying mutual funds and ETFs charge their own fees, usually 0.05%–1.0%+)
• Transaction or trading fees
• Any commissions on annuities, insurance, or product recommendations
• Account custody or platform fees

If the total exceeds 1.5% of your assets per year, you should be able to articulate exactly what additional value you’re getting in exchange. Over 30 years, a 1% fee difference on a $500,000 portfolio compounds to roughly $200,000–$400,000 in lost growth depending on returns. That’s not a hypothetical — that’s real money your advisor is taking out of your retirement.

If you can’t get a clear answer to “how much am I paying you, all-in, in dollars per year?” — that’s the answer.

3. Have They Reviewed Your Tax Strategy?

A good advisor coordinates with your overall tax picture. Specifically, they should have discussed:

• Tax-loss harvesting — selling losing positions to offset gains
• Asset location — placing tax-inefficient holdings (like bonds or REITs) in tax-advantaged accounts
• Roth conversions — moving money from traditional to Roth IRAs in lower-income years
• Capital gains planning — timing sales to minimize tax impact
• Charitable giving strategies — donor-advised funds, qualified charitable distributions

If taxes never come up in your conversations, or come up only at year-end as an afterthought, you’re likely leaving money on the table. Tax-aware advice can add 0.5%–1.0% to your annual after-tax returns — often more than the advisor’s fee itself.

The best advisors coordinate directly with your CPA. They share documents, jointly plan around major events, and treat tax efficiency as an ongoing optimization, not a once-a-year scramble.

4. Did They Create a Written Financial Plan?

Not just an investment proposal — a comprehensive written plan covering:

• Your specific financial goals with timelines
• Income and savings projections
• Retirement income strategy (which accounts to draw from, when, and how much)
• Insurance needs analysis (life, disability, long-term care)
• Estate planning considerations
• Risk tolerance and investment policy
• Tax planning approach

If you don’t have a written plan, ask for one. If your advisor won’t provide one, that’s a financial advisor red flag — not a maybe. A “plan” that exists only in your advisor’s head, or in a slick PDF that says nothing specific to you, is not a plan.

The plan should be reviewed and updated at least annually. If yours hasn’t been touched in 3+ years, the relationship has drifted into pure portfolio management without strategic oversight.

5. How Did Your Portfolio Perform vs. the Market?

Ask for a report showing your annualized returns compared to an appropriate benchmark over 3 and 5 years. The benchmark should match your asset allocation:

• 100% US stocks → S&P 500
• 60/40 stocks/bonds → 60% S&P 500 + 40% Bloomberg Aggregate Bond Index
• Diversified globally → MSCI All Country World Index + bond benchmark

A good advisor will produce this report without hesitation. A defensive advisor will tell you “you can’t compare yourself to the market” or change the subject.

Consistently underperforming an appropriate benchmark by 1-2% annually after fees might not sound like much, but compounded over decades, it represents a significant loss of wealth. Some underperformance is expected from active management — but if your advisor is charging active-management fees and delivering passive-index returns minus their fees, you’re paying for performance you’re not getting.

The SEC’s investor education resource at investor.gov offers free tools to help you evaluate your returns in proper context.

6. Do They Proactively Reach Out to You?

A good advisor doesn’t wait for you to call. They reach out when:

• Market conditions shift in ways that affect your plan
• New planning opportunities arise (tax law changes, market dislocations)
• Your life events warrant a review (job change, inheritance, major purchase)
• It’s been long enough that a check-in is overdue

The minimum standard for an advisor charging 1% AUM is roughly quarterly check-ins plus an annual comprehensive review, plus reactive outreach during major events. One-way communication — you always calling them — is a gap worth addressing.

A useful test: when was the last time your advisor called or emailed you about something specific to your situation, not a generic market update or holiday greeting? If you can’t think of a single example in the last 12 months, you’ve found your answer.

7. Do They Understand Your Full Financial Picture?

Does your advisor know about:

• Your mortgage and other debts
• Employee benefits including 401(k) match, RSUs, ESPP, deferred comp
• Your spouse’s income, accounts, and benefits
• Aging parents and potential caregiving costs
• Business interests, side income, or rental properties
• Your existing estate plan (will, trusts, powers of attorney)
• Insurance you already have

A great advisor understands the full picture and plans holistically. One who only manages “the account” — meaning the assets they directly oversee — is leaving significant value unrealized. The best opportunities for tax savings, estate optimization, and retirement strategy show up at the seams between accounts, not within any one of them.

If your advisor has never asked about half the items on this list, they’re not really planning for you. They’re managing a portfolio.

8. Would You Confidently Refer Them to a Family Member?

This is the gut check that surfaces what the other 7 questions sometimes miss.

If your sister, your best friend, or your adult child asked you to recommend a financial advisor — would you send them to yours without hesitation?

Any pause is worth examining. The most common pauses sound like:

• “Well, they’re good for me, but I’m not sure if they’d be a fit for everyone…”
• “I think they’re fine, but I haven’t really tested them…”
• “Yes, but you’d want to ask them about [specific concern]…”

Each of those is your gut telling you something the rest of you hasn’t fully admitted yet. A good advisor is one you’d refer enthusiastically. A barely-good-enough advisor is one you’d mention only if asked.

How Many “No” Answers Is Too Many?

Honest scoring usually breaks down like this:

• 0–1 weak answers: Your advisor is genuinely good. The relationship is working.
• 2–3 weak answers: The relationship has gaps that should be addressed in a direct conversation. The advisor may rise to it. Worth one round.
• 4 or more weak answers: The structural issues are too significant for a single conversation to fix. It’s time to seriously consider whether to fire your financial advisor and start a search for a new one.

The 4-or-more threshold isn’t arbitrary. Half the items on this list are basic professional standards — a written plan, transparent fees, performance reporting, proactive communication. An advisor failing more than half of those isn’t underperforming; they’re not really doing the job at all.

What to Do Next

If this exercise raised real concerns, the most useful next step is a structured assessment of your specific advisor across 10 evaluation criteria. Our free Financial Advisor Report Card quiz takes about 3 minutes and gives you a personalized grade — including which of the 8 areas above are weak, what’s working, and the exact questions to bring to your next advisor meeting.

Take the free 3-minute quiz →

It’s free. There’s no email signup to start. And it tells you in plain language whether the relationship is working or whether it’s time for a harder look.