Lifestyle

6 Things Your Financial Advisor May Not Be Telling You

By Curtis Jones · June 30, 2026

Most Americans who work with a financial advisor trust them implicitly. That trust is usually well-placed — but it is not always well-informed. Here are six things that financial advisors are not required to volunteer and that most clients never think to ask about.

1. Whether they are a fiduciary — and when they are not

A fiduciary is legally required to act in your best interest. A non-fiduciary advisor is held to a lower “suitability” standard — meaning they only need to recommend products that are appropriate, not necessarily the best available. Some advisors are fiduciaries for certain types of accounts but not others. Ask directly: “Are you a fiduciary in all of your interactions with me?” If the answer is anything other than an unconditional yes, understand what standard governs the advice you’re receiving.

2. How they are compensated

Financial advisors are paid in one of three ways: fee-only (you pay them directly), commission-based (they earn commissions on the products they sell you), or a hybrid of both. Commission-based advisors have an inherent incentive to recommend products that pay them the highest commission — even if a lower-commission product would serve you better. Fee-only advisors remove that conflict. Ask: “How do you get paid, and do you earn commissions on any of the products you recommend?”

3. The total cost of your investments — not just the advisory fee

Your advisor may charge 1% of assets under management. But the mutual funds and ETFs inside your portfolio carry their own expense ratios — typically 0.03% to 0.75% annually. These fees are deducted from your returns before you see them. On a $500,000 portfolio, a 1% advisory fee plus a 0.50% average expense ratio costs $7,500 per year — not the $5,000 you thought you were paying. Ask for a total cost disclosure that includes all fees across all layers.

4. Whether they earn more for recommending certain products

Some advisory firms have revenue-sharing agreements with mutual fund companies — meaning the firm earns additional compensation when advisors place clients in specific funds. This doesn’t necessarily mean the recommendation is bad, but it does mean the advisor has a financial reason to recommend Fund A over Fund B that has nothing to do with your portfolio. Ask: “Does your firm receive any additional compensation from the fund companies whose products you recommend?”

5. Your portfolio’s actual performance versus a benchmark

Most advisors report your returns in absolute terms — your portfolio earned 8% last year. What they rarely volunteer is how that compares to a relevant benchmark. If the S&P 500 returned 12% and your portfolio returned 8%, you underperformed the market by 4% — and paid fees for the privilege. Ask for performance relative to an appropriate benchmark, net of all fees.

6. What happens to your account if the advisor leaves the firm

Advisor turnover is common. If your advisor moves to a different firm, your account may be reassigned to someone you’ve never met — or you may be pressured to move your assets to the new firm. Understanding in advance what happens in that scenario protects you from a disruptive transition. Ask: “If you leave this firm, what happens to my account?”

The best financial advisors welcome these questions. The ones who don’t are the ones you most need to ask.