Four questions carry a first meeting: how are you paid, are you a fiduciary for this account, what does this cost per year in dollars, and where is your record. The third has a published number to measure any answer against — FINRA prices a 1 percent annual fee at $28,000 over 20 years on a $100,000 investment earning 4 percent. What decides whether a question belongs in the meeting at all is simple: definitions have answers on a page, and anything that turns on your account balances, tax position or time horizon does not.

Ask how the person is paid first

The SEC's publication Ask Questions, dated 31 July 2007, puts compensation at the center of the list and phrases it without softening: how do you get paid, by commission or by assets managed; "do I have choices on how to pay you"; "do you make more if I buy this stock rather than another"; are you participating in a sales contest. Two more from the same page are about execution rather than the person: "where do you send my order to be executed", and "you have told me what it costs to buy this stock, so how much would I receive selling it today."

That page — the SEC's Ask Questions — also carries the product list: what are the total fees to purchase, maintain and sell this investment, how liquid is it, "what is the maximum I could lose" — and a progress list for later meetings, including "how much am I paying in commission or fees" and "what criteria will I use to decide when to sell." None of these require anything to be disclosed about your balances before they are answered.

Put the fee answer in dollars

An example, using published figures rather than a recommendation. An asset-based fee of 1 percent on a $100,000 account is $1,000 in the first year, charged whether the account rises or falls. FINRA's page on fees and commissions runs the same rate forward and states that a fee of only 1 percent per year for 20 years on a $100,000 investment earning 4 percent costs $28,000 — twenty-eight times that first-year charge, because each year's fee also removes the return the fee itself would have earned.

FINRA's page on fees and commissions also states that free trading does not mean free investing, and lists what sits alongside an advisory fee: commissions, markups and spreads when a firm sells from its own inventory, sales loads, surrender charges on early variable-annuity withdrawals, and annual fund operating expenses. Ask for those as a schedule, in writing, and read it by category rather than by headline rate. A firm that answers the fee question with a percentage has answered half of it; the dollar figure per year is the other half.

Check the record before the meeting

Verification is a task with named databases, not an impression formed in the room. FINRA's page on checking registration of sellers and investments gives the opening question — who are you registered or licensed with, and in what capacity — and then the lookups: BrokerCheck or the hotline on (800) 289-9999 for securities professionals, the SEC's Investment Adviser Public Disclosure database for advisers, the SEC's Action Lookup Tool for individuals with formal SEC actions, a state securities regulator, and EDGAR for the investment itself. The same page notes that an unregistered investment generally means more risk.

Know what the report covers. FINRA's page about BrokerCheck states that a report on a currently registered individual shows employment history for the last 10 years along with qualifications and a disclosure section covering customer disputes, disciplinary events and certain criminal and financial matters, and that an individual stays in the system for 10 years after registration ends — longer when subject to a final regulatory action, a relevant criminal conviction, an investment-related civil injunction or an arbitration award over sales practice violations. A clean report is a record of those categories, not a character reference, which is why confirming the person contacting you is the person in the record is a separate step.

The two-page document that answers the rest

Firms already publish a short summary designed for this conversation. The SEC's frequently asked questions on Form CRS, last updated 8 December 2023, state that a relationship summary runs to no more than two pages, or four pages for a firm filing a combined version covering both its brokerage and advisory relationships, and that it is disclosure rather than marketing material, true and free of omissions that would make the required disclosures misleading.

Two pages is short enough to read before the meeting, and it names services, fees, conflicts, standard of conduct and disciplinary history. Arriving with it read turns the appointment into the part no document covers: the questions whose answers depend on numbers only you hold. Bring the claims that prompted the meeting as well — a screenshot, a message, a promised return — and ask for each to be checked, because turning a claim into checkable questions is work the record supports and conversation does not.

Source references

Primary sources used for this guide. Follow the links for the original scope, definitions and conditions.