Finding a good financial advisor | The Informed Investor

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USATODAY recently reported a dramatic increase in the use of AI for financial advice. Citing a study undertaken by TD Bank, it reported that the percentage of Americans using AI to help manage their finances jumped from 10% in 2025 to 55% in 2026. Has AI become a more popular option for consumers than working with an actual financial advisor?

According to a 2025 Gallup poll, only about two out of five Americans consult with financial professionals for advice. At the same time, there has been an increased awareness of the need for financial literacy. In fact, a personal finance education program for K-12 students in New York State mandated by the Board of Regents will be launched this fall. Increased financial literacy will help consumers whether they decide to work with a financial advisor or not.

This column continues our focus on choosing a financial advisor who can assist you in the process of reaching your financial goals at various stages of your life. Despite the fact that financial advisors enter the marketplace with diverse backgrounds, experiences and credentials, most refer to themselves as “financial advisors.” The term “broker” appears to have disappeared from the lexicon. How does one sort it all out?  Our most recent column emphasized the importance of: (1) developing an understanding of the two principal industry sectors and (2) conducting due diligence on both the firm and the individual advisor prior to scheduling a meeting. This column offers thoughts for investors who might be preparing for an interview with a prospective financial advisor once the possibilities have been identified.

Preparing for the interview

As you sort through the referral possibilities, you may not be sure whether a brokerage account or an advisory account will best suit your needs. For purposes of our discussion, we will assume that one financial advisor on your list is associated with a dual registrant firm, i.e. one that is registered both as a broker-dealer and as an investment adviser.

We will also assume that you have already read the firm’s Form CRS which appears on its website. For readers who may be unfamiliar with Form CRS, since 2020, regulators have required both broker-dealers and investment advisers to post Form CRS on their websites, if they have one. Form CRS features an easy-to-read question and answer format with required information presented in a prescribed sequence under standardized headings that include, among others: “What investment services and advice can you provide me?”  “What fees will I pay?”  This standardized format permits investors to make comparisons among firms easily from the comfort of their homes!

We will also assume that you located the firm’s Brochure (Form ADV, Part 2A) on the website of the United States Securities and Exchange Commission which will enable you to learn more about the advisory services that the firm provides. Rules require that the firm deliver its Brochure to you before or at the time that you enter into an investment advisory contract. Rules also require that the firm deliver to you, as a prospective client, a Brochure Supplement for the financial advisor that you intend to interview before or at the time that the financial advisor begins to provide advisory services to you, i.e., when you become a client of the firm. Because the firm is not required to file Brochure Supplements for its advisory personnel with the Commission, you may or may not find these important summaries on the Commission’s website. The Brochure Supplement is an important resource because it includes a treasure trove of information about each individual advisor, including the individual’s educational background and business experience as well as disciplinary information. You might want to request that the Brochure Supplement be sent to prior to the meeting or be provided to you at the meeting.

The interview

You will want to prepare for the meeting by formulating questions based on your specific financial priorities as well as more general questions about the firm and the advisor. Let’s assume that you are interested in both financial planning and portfolio management services. You might consider these suggested questions:

• If I were to engage the firm to construct and manage a portfolio on a discretionary basis, who would actually choose the investments? Would you do that? Or would you delegate that role to a third-party manager? Would you monitor the performance of the portfolio investments?
• If I were to engage the firm to construct and manage a portfolio on a non-discretionary basis, would you develop the recommendations? Would you monitor the performance of the portfolio investments?
• Once you have sufficient information about my financial profile, how would you construct the portfolio? How would you determine the market index that would be a suitable benchmark for comparing portfolio performance results?
• I inherited some stocks issued by local companies which I plan to hold indefinitely. Would these positions be included in my portfolio? Or would it be more cost effective for me to hold these positions in a brokerage account rather than an advisory account?
• Can you explain the economics of these account types? How do the firm’s obligations to me differ when securities are held in a brokerage account as opposed to an advisory account.
• If you recommend mutual funds or exchange-traded funds for client portfolios what type of research do you conduct prior to making these recommendations?  Do you read the prospectuses for these funds prior to making the recommendations?
• What, if any, additional expenses might I incur in connection with the purchase of mutual funds or exchange traded funds for my portfolio?
• Does your firm sponsor or participate in wrap-fee programs? If so, can you explain how they work and tell me whether you would recommend that type of investment program for me?
• I noticed that your Brochure Supplement mentions the CFP credential. Can you tell me about the significance of that credential and what you are required to do in order to maintain it?

Shopping guides

Barron’s recently published “An Advisor Shopping Guide for Aspiring Millionaires.”  The 20-page guide purports to list the “Top 1500 Financial Advisors” in the United States for 2026. The guide states that rankings are based on assets under management, revenue generated by the advisors for their firms and a variety of “quality of practice” records, including advisors’ compliance records. Of the 125 advisors listed for New York State, only two were located outside the New York City metro area. Other shopping guides, which can be found on the internet, might be useful. Nevertheless, we encourage investors to engage in a thoughtful selection process. A successful relationship with one’s financial advisor depends on multiple factors. Caveat emptor!

This column is a collaborative effort between Patricia Foster and Jesse Cramer. Patricia is a corporate/securities law attorney. Her experience includes representation of clients in various sectors of the financial services industry, including broker-dealers, investment advisers and investment companies. Jesse is a Financial Advisor at CAPTRUST. The information in this column is provided for educational pur­poses and does not constitute legal or investment advice.

© 2026. Patricia C. Foster. All Rights Reserved.