10 questions to ask a financial adviser

When you hire a financial adviser, you are entering a long-term relationship with someone who will know most everything about your financial life.

You would think there would be an app for that, right? Until there is, asking a few key questions can help you find the best match. If the idea of interviewing advisers makes you nervous, keep in mind that even they think it's important to do interviews. Be sure to tell advisers that you are interviewing others, so they know you are not making an immediate decision.

Ready to interview? Try these questions to start.

Fiduciaries work in the best interest of the client, while nonfiduciaries need only recommend products that are "suitable." If the adviser makes more money for recommending some products over others, then she's not a fiduciary, and the potential exists for conflicts of interest.

The fiduciary question touches on how the adviser is paid, but it makes sense to ask this question directly.

"The financial industry is this weird meld of commission and hourly and percentage of assets," said Kyle Mast, a financial planner in Wilsonville, Ore. "It's really hard for the average consumer to dig in and ask."

But ask you must.

If the adviser's response is "fee-based" or anything else, ask about all the ways the adviser is getting paid. If you don't understand the adviser's response? Head for the exit.

In addition to paying the adviser, you will face other fees, and you will want to know what they are. Fees can decimate your savings. A NerdWallet analysis found that a 1 percent mutual-fund fee could cost millennials $590,000 in retirement savings. If the adviser uses high-cost investments, consider another adviser. Ask about any other fees, including the costs of any outside managers and any mutual fund sales loads or front-end charges.

Consider what you are looking for. Then make sure the planner aligns with your needs. For example, do you want holistic financial planning services, including tax and retirement planning, or are you looking for an adviser whose main focus is managing your investment portfolio? Some advisers might include your teenage or young adult children in the planning, others not so much.

Also, ask the adviser: Who are your typical clients? Find an adviser who is used to a situation like yours and able to help you meet your goals.

Put another way: How much access will I have to you? You want to know how often you will meet with the adviser and whether the adviser is available for phone calls or e-mails outside of scheduled appointments.

You have heard how important it is to be diversified, right? Your asset allocation is how you create a diversified portfolio. "It drives most of your returns," Finn said.

Ideally, your financial adviser has hired an independent custodian, such as a brokerage, to hold your investments, rather than acting as his or her own custodian, à la Bernie Madoff, who defrauded clients through a multibillion dollar Ponzi scheme. That provides an important safety check.

Advisors should use benchmarks that directly relate to what they are invested in, or be able to explain why they don't. Some managers will use a "straw-man benchmark," Finn said. For example, the adviser said: "My goal is to beat the Standard & Poor's 500."

Asking this question is a way of ensuring the adviser has your tax bill in mind when making financial decisions on your behalf. Asking about taxes and fees is a way to delve into what your estimated net return might be.

Finally, don't forget that you are paying for someone to clarify your financial life, not make it more confusing. If an adviser makes you feel dumb, walk away.