5 Questions to Ask Any Financial Advisor Before You Hire Them

Do You Need a Retirement Planner or Financial Advisor?

Folks, let me be upfront with you. Picking a financial advisor is one of the most important decisions you’ll make as you approach retirement. And yet most people spend more time researching a new car purchase than they do evaluating the person who’s going to manage their life savings.

Here in Upstate South Carolina — whether you’re in Greenville, Spartanburg, Anderson, or somewhere in between — there are a lot of financial planners and investment advisors to choose from. Some are genuinely excellent. Some may not be. And a few might be really good at sounding excellent without having the depth of experience you need for this stage of life.

So today I’m going to give you the five questions you should ask any financial advisor before you hire them — questions that reveal whether they truly understand retirement financial planning or whether they might be more focused on accumulating assets than helping you create a great retirement.

Question 1: Do You Focus on Retirement Income Planning, or Do You Work with Clients of All Ages?

This is the first and perhaps most important question. Retirement planning is not the same thing as investment planning during your working years. Turning a pile of assets into reliable, tax-efficient, inflation-adjusted income for 25 or 30 years is a completely different skillset from growing a 401(k) during your 40s.

If the advisor says something like, ‘I work with everyone from 30-year-olds to 80-year-olds,’ that’s not necessarily a red flag — but it should prompt a follow-up: ‘What percentage of your clients are in or near retirement?’ If most of their business is accumulation-focused, they may not have the deep experience you need for the distribution phase.

At our firm, we work exclusively with retirees and pre-retirees here in the Upstate. That focus is intentional. We know what questions to ask. We know where the tax traps are. We know how to build income that lasts.

Question 2: As a Financial Planner or Financial Advisor, how Do You Get Paid?

This question makes some advisors uncomfortable, but it shouldn’t. Every financial advisor and investment advisor gets paid somehow — and how they get paid might influence the advice they give you.

There are a few compensation models:

• Fee-only advisors charge you directly (flat fee, hourly, or a percentage of assets) and don’t earn commissions on products they sell you
• Commission-based advisors earn money when they sell you financial products like insurance, annuities, or mutual funds
• Fee-based advisors do both — they charge fees and may also earn commissions

None of these is automatically bad, but you deserve to understand the model before you sign anything. Ask specifically: ‘If you recommend a product to me, do you receive a commission for selling it?’ A financial planner should answer this question clearly and without defensiveness.

Question 3: Can You Show Me How You’ll Create Guaranteed Income in my Retirement Plan?

This is where you really start to separate the advisors who focus on retirement from the generalists. A lot of financial advisors are great at building investment portfolios, but retirement requires more than that. It requires a specific plan for how you’ll pay yourself every month — especially when the market has a rough year.

Ask the advisor to walk you through their specific process for creating retirement income. Listen for whether they mention:

• Social Security optimization strategies
• How they handle the gap between what you’ll get from Social Security and what you actually need
• What strategies they use to create predictable retirement income
• How they help protect income during market downturns

Here’s a hypothetical example to illustrate why this matters. Imagine a couple from Clemson — let’s call them Frank and Diane — who retired with $750,000 in savings. Let’s say their previous advisor had given them a ‘balanced’ portfolio and told them to take 4% per year. Sounds reasonable, right? But when they come to see us, we might discover that if the market dropped 25% in their first two years of retirement, their income strategy would force them to sell investments at exactly the wrong time, potentially shortchanging their retirement by hundreds of thousands of dollars over 25 years. We call this sequence of returns risk, and it’s one of the biggest threats to a comfortable retirement.

A retirement planner should be able to explain clearly how they help to protect against this risk.

Question 4: What’s Your Process for Tax Planning in Retirement?

Taxes can be one of the biggest expenses in retirement — and yet many financial advisors might barely address them. In our opinion, a great financial plan should include a proactive tax strategy, not just investment returns.

Ask specifically about:

• Required Minimum Distributions (RMDs) and how they affect your tax bracket
• Roth conversion strategies
• How they handle Social Security taxation
• Medicare IRMAA surcharges and how income planning affects them

According to IRS data, more than 90% of traditional IRA and 401(k) assets will eventually be fully taxable¹. If your retirement planner doesn’t have a specific strategy for managing that tax liability, you could end up paying tens of thousands of dollars more than necessary over the course of your retirement.

We conduct insightful seminars on this very topic at libraries and universities here in Greenville and Spartanburg. The feedback we get from attendees every time is, ‘I had no idea about any of this.’ That’s not because people aren’t smart — it’s because many advisors may not bring it up proactively.

Question 5: What Happens to My Plan If My Spouse Passes Away First? How Do You Address that in my Financial Plan?

This may be the most important question most people never think to ask. In our experience meeting with thousands of retirees throughout Upstate South Carolina, one of the most common — and heartbreaking — situations we encounter is a widow or widower who has no idea how their financial picture changes when their spouse is gone.

When a spouse passes, several things happen at once: the lower Social Security check goes away², certain expenses may actually increase (in-home care, hired help for things the deceased spouse used to do), and tax filing status changes from married filing jointly to single — which may push the surviving spouse into a higher tax bracket.

A truly comprehensive retirement plan models both scenarios: what does retirement look like with both spouses alive, and what does it look like for the survivor? If your advisor hasn’t walked you through this exercise, it could be a significant gap in your planning.

We had a client — let’s call her Margaret from Travelers Rest — who came to us two years after her husband passed. He had handled all the finances. She didn’t know where their accounts were, what she was entitled to from Social Security, or how much monthly income she actually had. It took us months to piece it all together. We got her on solid footing, but the transition would have been so much smoother if this had been built into their plan from the beginning.

Bonus: A Few Green Flags to Look For in a Financial Advisor or Financial Planner

Beyond the five questions above, here are a few signs you’ve found a retirement planner that could be a good fit:

• They ask more questions than they answer in the first meeting — a good advisor wants to understand your full picture before recommending anything
• They talk about all five pillars of retirement: income, investments, taxes, healthcare, and legacy — not just investment performance
• They bring your spouse or partner into the conversation — retirement planning is a family matter
• They explain things in plain English without jargon — you should understand exactly what’s happening with your money

We’re Here to Answer Every One of These Questions — Honestly

At Common Sense Retirement Planning, we welcome these questions. We think you should ask them. We’re proud of our process, our team, and the thousands of people we’ve helped here in Greenville, Spartanburg, Anderson, Clemson, and Travelers Rest build retirement plans that work in real life — not just on paper.

Our consultations are completely complimentary and there’s absolutely no pressure. Come in, ask us the hard questions, and let’s see if we’re the right fit for you. We have offices in Greenville, Spartanburg, and Anderson ready to serve you.

References

1. IRS Statistics of Income Division. Individual Retirement Arrangement (IRA) Activity. Washington, DC: Internal Revenue Service; 2023. Available from: https://www.irs.gov/statistics

2. Social Security Administration. Survivors Benefits. SSA Publication No. 05-10084. Baltimore, MD: SSA; 2024. Available from: https://www.ssa.gov/pubs/EN-05-10084.pdf

Securities and advisory services offered only by duly registered individuals through Madison Avenue Securities LLC, member FINRA/SIPC and a Registered Investment Advisor. MAS and Phillip Allen Inc. or Common Sense Retirement Planning are not affiliated entities. Artificial Intelligence was used to create this content. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Common Sense Retirement Planning.

A Roth IRA conversion is a taxable event. Our Firm does not offer legal or tax advice. Consult with your legal or tax advisor regarding your situation.

Investing involves risk, including the potential loss of principal. Any references to protection, safety or lifetime income, generally refer to fixed insurance products, never securities or investments.

‍