15 questions to ask to make sure your financial adviser is working in your best interest

How are you compensated?

This is one of the most important questions to have in your back pocket. Unbeknownst to many, a lot of advisers earn commissions by recommending certain financial products and services to you.

"The problem is that this system incentivizes advisors to sell high-fee investments, annuities, and insurance," Davidson explains. "High-fee mutual funds, annuities, and insurance policies typically perform worse than lower-fee options because the fees eat into your return."

You'll want to ask your adviser if they're allowed to sell investments outside of what their employer offers, Davidson says: "If the answer is no, chances are that you should decide not to limit your financial success by working with these advisors. If the answer is yes, find out exactly how selling outside investments affects each advisor." For example, will they get a lower commission for selling outside investments?

More specific questions you can ask:

• Do you earn fees or commissions based on the number of products that I buy or the size of my investment?

• Will you earn a higher fee or other type of compensation if I invest in certain products you recommend or will you receive fees for services related to specific investment products?

• Will you provide a list of the fees and commissions you receive either directly from me or from other sources in writing?

Are you a licensed or registered investment adviser?

"Financial planning requires proper training," Davidson explains. "Like a surgeon who is not properly trained and prone to make mistakes, your financial advisor may simply not have the training, knowledge, or experience to deliver sound advice to you."

Davidson recommends looking for an adviser with at least 10 years of experience in financial planning and who has a CFP (certified financial planner) designation, which is considered the "gold standard" for financial planning. To give you an idea of the training required for this designation, "the pass rate for the exam to become a CFP certificant is about the same as the pass rate on the bar exam that law school grads are required to take in order to practice law," she explains.

Ask your adviser about their experience and certifications — and then verify it. Davidson recommends using www.finra.org: "Type your adviser's name into the FINRA database and you'll learn what securities licenses this person actually has and, even more important, whether or not any complaints, disciplinary actions, suspensions, or very frequent changes of employment appear on his or her record ... You'll want to see a completely clean record ... Even a single complaint, and certainly any disciplinary action, is a major red flag."

More specific questions you can ask:

• Are you registered with the State, US Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), or the CFP board?

• For how long? What is your experience?

• Who supervises you, or, are you a sole practitioner?

• If a sole practitioner, do you have professional liability insurance?

• Have you (or your firm) ever been disciplined? For what?

Read the DOL's full guide for consumers on how to tell if your adviser is working in your best interest.