Before you commit money to a new product or sign a new advisory mandate, a handful of questions will surface most of what matters. None of them are technical. None of them are confrontational. A good advisor will welcome them.
The five questions.
- What are the total fees I'll pay, expressed as a single percentage of my investment per year? You want one number, honest, all-in. If you get a range, ask for the top of it.
- Who earns what, out of that number? Fund manager, platform, advisor. The breakdown reveals the shape of the relationship.
- What happens to my fees if my investment goes up? Goes down? Stays flat? Tests whether performance fees and sliding scales work fairly in each scenario.
- How do you get paid if I leave? Exit fees, trail commissions, surrender penalties. You want to know the cost of disagreeing later.
- What's the worst case, over the first five years? Forces a conversation about market drawdowns and what you'd still be paying in them.
Reading the answers.
Clear, specific, unrehearsed answers mean you're probably in good hands. Vague answers, deflections, or "it depends" without follow-up explanation are signals. Not always bad ones: the topic is legitimately complex. But the pattern of whether questions get answered honestly is usually the signal that matters most.
If the paperwork is thick and the explanation is thin, the ratio is the problem.