Unexpected money decisions hit hard, and they rarely arrive when things are going well. A spouse is gone. A business is sold. A family member passes away. And things get tricky when you are suddenly managing more than $2 million, especially when it is spread across several accounts at several institutions. You find yourself wondering where to turn for reliable advice.

The real question is: what does reliable advice look like?

What “fiduciary” actually means

A fiduciary is someone with a legal duty to act in your best interest. But the word is thrown around a lot, and fiduciary advice comes in all shapes and sizes, because “fiduciary” does not mean specialized advice for your particular situation. It is also an awkward thing to ask about. Few people are comfortable sitting across from a wealth advisor and saying, “Are you a fiduciary all the time, or just in writing?”

From our perspective, a true fiduciary boils down to a few things, and the first is how the advisor is paid. There is a big difference between fee-only, fee-based, and commission.

• Commission means the advisor is paid by the products you buy — mutual funds, annuities, insurance. The advice and the sale are the same transaction, and you should assume they are connected.
• Fee-based means the advisor charges you a fee, usually a percentage of the assets they manage, but can also earn commissions on certain products. This has become the most common model in the industry over the last two decades, largely because clients grew tired of wondering whether a recommendation was advice or a sale. It is a real improvement over pure commission, but the word “based” is doing some work in that phrase.
• Fee-only means the advisor is paid by you and only by you. No commissions, no product payments, no referral fees. It is the strictest form of the fiduciary standard, and the easiest to verify.

Five signs it’s time to consolidate your advice

1. Your assets are spread across accounts you no longer track closely.
2. You’ve had a major life change: widowhood, divorce, an inheritance, the sale of a business or a property.
3. You are approaching 73, and required minimum distributions on a large IRA are about to become a tax problem rather than a theory.
4. Your estate is near or above Illinois’ $4 million estate tax threshold, which is far lower than the federal one.
5. You’ve been handling it yourself, and you would rather spend those hours elsewhere.

Questions to ask any advisor you interview

How are you paid, exactly? Some women feel uncomfortable asking this. It is essential. You can soften it by asking, “How are you compensated for your advice?” But be sure to also ask, “How are you compensated for managing my assets?” Those are two very different questions. The answers will help you distinguish between a financial advisor who is essentially a salesperson, outsourcing your money to other companies, and one who also holds portfolio management credentials and does the work.

Where is my money held? Whether an advisor works with several custodians or just one matters, because you do not want to move money out of accounts you would prefer to keep simply to make the advisor happy. We employ both methods. We have chosen Charles Schwab as our custodian of choice, but we regularly advise on money that is managed elsewhere.

How many clients do you manage? There is nothing wrong with a large firm that has a single figurehead and a staff of advisors to help you along the way. That said, many people come to us because they are frustrated with the turnover of their assigned advisor or unimpressed with his or her knowledge. We keep our practice to 40 high-net-worth families, because we think your financial plan should directly intersect with your investment decisions and your tax decisions, and that only happens when the same person is looking at all three.

What happens if the market drops 30%? There is no magic answer, because the truth is that some pockets of your money may drop by that much, offset by other monies in your portfolio that are more conservative. It all comes down to the risk you are willing to take, and calibrating that risk is the single most important duty of a fiduciary advisor. An advisor who answers this question with a sales pitch has told you something.

Can I see your Form ADV? Every registered investment advisor must file this disclosure with the SEC, and Part 2 of it is written in plain English. It tells you how the firm is paid, what conflicts of interest it has, whether it has any disciplinary history, and how much money it manages. You can also look it up yourself at adviserinfo.sec.gov. An advisor who hesitates to hand it over has also told you something.

What is your experience with women managing money on their own? The answer will tell you all you need to know. It’s called gut instinct. Trust it.

Why women wait too long

In my 30 years of experience, women wait too long. Why?

First, many are simply not interested in the subject matter. That does not mean they don’t want to make money. It means the ins and outs of the financial markets are boring to them, and they are not wrong.

Thirty years ago, many of the women I worked with were damsels in distress. They wanted an advisor to take over the decision-making entirely and hand them the result. Today’s women are far more savvy. They want to be involved, even if only at the overview level.

What has always irritated me is the woman who automatically delegates the decision to another man in her life, with no intention of participating in her own financial future. I could write an entire article on the phrases I have heard over the years that make no sense at all. Perhaps I will.

The cost of waiting

The cost of waiting is rarely visible until it is. The account that was never consolidated, the RMD that was never planned for, the estate that crossed the Illinois threshold without anyone noticing — none of these announce themselves. They show up later, on a tax return or in a probate court, when the choices have narrowed.

You do not need to have everything figured out before you call. You need to know what questions to ask. Now you do.