How to Choose a Financial Advisor

For families in Dayton and throughout Ohio

Randy Derenzo in a pink polo shirt and a male client in a blue shirt sitting at a table, engaged in a discussion with documents, a laptop, and charts.

Selecting a financial advisor is one of the most important decisions you can make. You are choosing a long-term partner to help guide decisions that affect your family, your future, and your overall financial well-being.

Many advisory firms look the same on the surface. But how they actually work, how they're compensated, and whether they have conflicts of interest vary dramatically. Asking the right questions upfront can quickly reveal the differences that matter. We encourage you to ask questions and review publicly available disclosures before choosing any advisor - including us.

To help you make an informed decision, we've created this resource outlining what to look for when evaluating an advisor. Below, you'll find guidance on choosing a financial advisor along with ten important questions to ask during your conversations.

Whether you're meeting with us or interviewing other advisors, we hope this equips you to ask thoughtful questions and choose a financial partner with confidence.

Choosing a Financial Advisor: Understand the Fundamentals and 10 Questions Worth Asking

Part 1: Understand the Fundamentals

Before sitting down for an initial conversation, it helps to understand the fundamentals of a firm’s operation and structure. 

Fiduciary Responsibility

A fiduciary is legally required to act in your best interest. However, not all advisors operate under a fiduciary standard 100% of the time, and the standard that applies can vary depending on the type of account or service being provided.

When evaluating any advisor, it’s important to understand how they are compensated and whether any conflicts of interest could influence recommendations. Look for a clear, unambiguous commitment to the fiduciary standard across the full advisory relationship.

Form ADV Part 2A (The Firm Brochure)

Before you even meet with a firm, you can look up their regulatory history. Every Registered Investment Advisor files Form ADV with regulators. This document explains, in plain language, how a firm operates, how it is compensated, and how conflicts of interest are managed.

You can access any advisor’s Form ADV Part 2A through the SEC’s Investment Adviser Public Disclosure website: SEC Investment Adviser Public Disclosure (IAPD).

 When reviewing the document, focus on whether the firm’s incentives align with yours. Pay particular attention to these sections:

  • Item 4 – Advisory Business: Review the firm's history, ownership, and services to ensure they align with your needs.

  • Item 5 – Fees and Compensation: Understand exactly how the firm is paid and what your total costs may be, including underlying investment expenses.

  • Item 7 – Types of Clients: Does the firm regularly serve clients with your level of financial complexity?

  • Item 8 – Methods of Analysis and Investment Strategies: How does the firm think about investing? Is the approach disciplined and evidence-based, or does it rely heavily on market predictions and stock selection?

  • Item 9 – Disciplinary Information: Review any regulatory actions, legal issues, or disciplinary history involving the firm or its advisors.

  • Item 10 – Other Financial Industry Activities: Does the firm have outside business relationships, such as insurance agencies or broker-dealer affiliations, that could create incentives influencing recommendations?

  • Part 2B – Brochure Supplement: Review the education, experience, professional background, and disciplinary history of the individual advisor you will actually work with.

Don't worry if you need to read Form ADV more than once—it's a lot. Items 5 (Fees and Compensation), 9 (Disciplinary Information), and 10 (Other Financial Industry Activities and Affiliations) are important sections to review, but potential conflicts may be disclosed throughout the brochure.

Once you’ve reviewed these baseline considerations, the next step is to evaluate how an advisor operates and manages your money.  Use the questions below as a framework for comparison across any firm you’re considering. A good advisor should welcome thoughtful questions and answer them directly.

Part 2:  Ask the Right Questions

Fees & Compensation

  • 1. How are you compensated, and what will my total cost be?

    • What to Look For: A complete explanation of all costs—not just the advisory fee, but any underlying investment expenses and third-party costs. You should understand exactly what you'll pay.

  • 2. Do you receive any commissions or compensation from third parties?

    • What to Look For: A transparent explanation of whether any financial incentives exist and how potential conflicts are managed.

Relationship & Communication

  • 3. What types of clients do you typically serve?

    • What to Look For: Experience working with clients who have similar goals, challenges, and financial complexity.

  • 4. How often will we meet and communicate?

    • What to Look For: A defined communication cadence that matches your preferences and expectations.

  • 5. Will I work directly with you or another member of your team?

    • What to Look For: A clear understanding of who is responsible for your planning, communication, and investment oversight.

  • 6. How do you work with my CPA and attorney?

    • What to Look For: A collaborative approach. Investments, taxes, estate planning, and legal strategies should work together—not exist in separate silos.

Strategy & Discipline

  • 7. How do you construct portfolios and select investments?

    • What to Look For: A clearly defined process explained in plain language. Understand how investments are selected, monitored, and adjusted over time.

  • 8. How do you help clients stay disciplined during market volatility?

    • What to Look For: A clear approach that keeps clients focused on their long-term plan during downturns. Not just reassurance, but disciplined structure.

  • 9. What is your philosophy regarding investment costs and taxes?

    • What to Look For: A deliberate focus on efficiency. Managing investment costs and reducing unnecessary tax impact plays an important role in long-term outcomes.

  • 10. Can I see an example of a financial plan or how you track client progress over time? What does your planning output actually look like?

    • What to Look For: Real examples that help you evaluate the depth, clarity, and sophistication of the firm's planning process, rather than vague claims about being more caring or personalized.

Take the Guesswork Out of the Decision

The right advisor should answer these questions clearly, transparently, and without pressure. A productive conversation can quickly reveal whether a firm's philosophy, process, and communication style align with what you're looking for.

The goal is to find a trusted partner who takes the time to understand your situation, explains complex topics clearly, and helps you make thoughtful decisions over time.

Want a simple reference for your next meeting?

Download our printable guide, "Finding the Right Partner: 10 Questions to Ask a Financial Advisor." It includes a practical checklist covering fiduciary responsibility, compensation, regulatory disclosures, and communication standards to help you evaluate advisors with confidence.

Frequently Asked Questions

  • It means our advice is objective. As fiduciaries, we are legally required to act in your best interest, removing sales incentives from the advice process. Being fee-only means the only person who pays us is you. We do not sell financial products, earn commissions, or receive sales-based product incentives.

  • Yes. Bringing order to fragmented accounts is a core part of what we do. We help bring clarity and structure to your financial life by coordinating your assets into a single, unified strategy. This makes it easier to align your investments with your overall plan, manage risk, monitor progress, and understand exactly where you stand. 

  • We move beyond simply looking at an account balance. We use professional planning tools to integrate your income needs, tax considerations, and long-term sustainability. We help you understand where you stand today and the path most likely to support the future you envision.

  • Our role is to provide steady guidance when emotions run high. We use structured, diversified, low-cost strategies designed to participate broadly in long-term market returns. With a disciplined plan in place before periods of uncertainty, you’re less likely to make emotional decisions at exactly the wrong time.

  • No. Our first priority is to understand your entire financial picture so we can provide comprehensive advice. We deliver the best results when we can coordinate your full financial structure, and we review everything you own to determine the most effective approach. Active workplace accounts like a current 401(k), 403(b), or TSP typically stay where they are, but we integrate them into your overall plan so your entire portfolio is working in the same direction.

  • Many of our clients come to us after working with larger firms where communication was infrequent and advice felt impersonal. We provide a second opinion that is independent, transparent, and fully centered on your goals. 

  • At Derenzo Advisors, you work directly with me. Trust is built through ongoing relationships, not handoffs. You'll have direct access via phone, email, or text whenever questions arise.

  • Tax awareness is a core part of our coordination. Thoughtful planning isn’t just about growth; it’s about attention to account structure, withdrawal strategies, and tax efficiency. We often meet with our clients and their CPAs to coordinate strategies and ensure we are working together to reduce unnecessary taxes and improve the tax efficiency of your overall strategy.

  • No. Our philosophy is evidence-based and focused on long-term discipline. We do not chase investment trends or attempt to outguess markets. Instead, we believe you are best served through broad diversification and low costs—a disciplined approach designed to participate broadly in long-term market returns.

  • You can expect a pressure-free, no-obligation discussion. There is no "sales pitch." We simply focus on understanding your goals, your concerns, and your overall financial picture to see if our disciplined, relationship-centered approach is the right fit for your needs.

  • We work with clients through two distinct engagement models designed to match different levels of financial complexity and planning needs.

    1. Ongoing Wealth Management This engagement is designed primarily for individuals and families with $1 million or more in investable assets who are navigating increasingly complex financial decisions. It provides ongoing investment management, financial planning, and coordination across tax, estate, and personal and business planning.

    2. Project-Based & Hourly Planning This engagement has no asset minimum and is billed at a fixed hourly or project rate. It is designed for high-earning professionals, business owners, and families navigating a major financial transition, as well as those seeking targeted guidance on key planning decisions, including retirement account optimization, equity compensation, education funding, and tax-efficient savings strategies. It provides independent, objective advice without ongoing investment management. 

    If you're unsure which approach is most appropriate, schedule a brief introductory conversation. We'll discuss your goals, answer your questions, and determine whether we're the right fit.

  • We typically meet with clients quarterly during the first year and then in spring and fall for comprehensive reviews, adjusting based on each client’s needs and preferences. Many clients schedule additional check-ins around major life events (job changes, inheritance, home purchases, etc.). Between meetings, you have direct access to us via phone, text, or email whenever questions arise. Our relationships are ongoing, not transactional—we serve as an engaged, long-term partner helping you navigate your financial life.

  • We believe that clarity comes from having your data in one place. We provide every client with a Personal Financial Dashboard via RightCapital. This isn’t a static report; it’s an interactive financial planning tool where we can stress-test your strategy under different market conditions. We can model scenarios like retiring early, selling a business, or adjusting spending and see how these changes affect your long-term outlook. 

  • As the saying goes, the best time to plant a tree was twenty years ago. The second-best time is now. Every year financial decisions are delayed, valuable planning opportunities are missed. Over time, uncertainty compounds and course corrections become much more difficult. An introductory conversation costs nothing, but it can make a profound difference in your long-term financial future.

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