Three Questions To Ask Your Financial Advisor

How do you choose the funds you recommend to me?

The answer better not have anything to do with past performance because as every prospectus and mutual fund ad says, “past performance may not be repeated and should not be relied upon”.

What rate of return should I expect?

The number better be in the single digit range (and in the low single digit range if there is a significant income component).  It should also be lowered further to reflect the cost of products and the cost of advice.  

What motivates you to look for low-cost products on my behalf?

As was suggested in the previous question, returns are frequently lower for more expensive products with a similar mandate.