Questions to Ask Before Hiring an Investment Adviser

Choosing an Investment Adviser is a decision that plays out over years, not a single meeting — which makes the first conversation more important than it usually gets credit for. A handful of specific, direct questions will tell you considerably more than a general sense of whether you liked the person.

"Are You SEBI-Registered, and in What Capacity?"

This should be the first question, not an afterthought — and it needs a specific answer, not a general one. Our companion article on verifying SEBI registration explains exactly how to check this independently rather than relying on a verbal assurance, and why the specific registration category (Investment Adviser, not Research Analyst or a distribution registration) matters.

"How Exactly Are You Compensated?"

Ask whether the adviser is fee-only, fee-based, or commission-earning — and if fee-based, what the commission-earning component actually is. Our companion article on fee-only advisers versus bank relationship managers explains why this distinction matters more than it might initially seem, and a genuinely fee-only IA should be able to explain their compensation model in one clear sentence, not a vague reference to "a small service charge."

"What Does Your Fee Actually Cost Me Annually?"

Ask for the fee structure in concrete rupee terms against your specific portfolio size — whether it's a fixed annual fee or a percentage of Assets Under Advice, and whether that figure is inclusive of GST. Vague answers here are themselves informative.

"Can I See a Sample Advisory Agreement Before I Sign Anything?"

A properly compliant IA will have a standard-form agreement ready to show you in advance, not something assembled only once you've committed. Our companion article on understanding your advisory agreement walks through exactly what should be in it — asking to see it early lets you check that walkthrough against what you're actually being offered.

"What's Your Process for Understanding My Risk Profile?"

A genuine advisory relationship starts with a documented risk-profiling exercise — questions about your financial goals, time horizon, existing holdings, liquidity needs, and comfort with volatility — not a single generic questionnaire ticked off quickly to get to the product conversation. Ask specifically how this feeds into the advice you'll actually receive.

"What Happens If I'm Not Satisfied With Your Service?"

A compliant IA should be able to walk you through their grievance-handling process without hesitation — how to raise a concern, expected response times, and how SCORES and the Online Dispute Resolution mechanism come into play if things aren't resolved directly. Our companion articles on filing a complaint and on the Investor Charter cover exactly what you're entitled to expect here.

"What Happens to My Relationship If Something Changes at Your End?"

Ask what happens if the adviser's firm changes ownership, brings in a new partner, or winds down entirely — a properly prepared IA should have a clear answer, not a shrug. Our companion article on advisory relationship continuity covers exactly what SEBI's framework requires an IA to do in these situations.

"Do You or Your Firm Also Earn Distribution Commission Anywhere?"

This question specifically probes the IA-versus-distributor boundary covered in our companion article — a genuinely fee-only relationship shouldn't come with any hidden commission income sitting alongside the advisory fee for the same client relationship.

Why Asking These Questions Signals Something to the Adviser Too

A properly compliant, professionally run IA practice will welcome every one of these questions and answer them readily — hesitation, vagueness, or irritation at being asked is itself a meaningful signal about how the relationship is likely to go.

How We Help

While we don't provide investment advice ourselves, we help Investment Advisers build the documentation, disclosure practices, and compliance infrastructure that let them answer every one of these questions cleanly and confidently — advisory agreements, fee disclosures, risk-profiling documentation, and grievance processes that hold up to genuine client scrutiny. Our SEBI Intermediary Compliance practice supports IA practices in getting this architecture right.

This article is for general informational purposes and does not constitute investment advice or a recommendation of any specific adviser.