Determining if your current advisor or a potential one is the right fit for your family’s needs can be a daunting task. When seeking financial advice, it is imperative that you know what you want from an advisor and that the advisor is open and understanding to your goals. Remember, the financial services profession has evolved over the years. Clients recognize now that it is no longer important about what product is going to be sold to them, but rather what their advisor is going to do that will be transformative for their lives. I recommend that you go prepared for an interview meeting with a potential advisor with a list of questions that will provide a clear understanding of how they run their business. Answers to most of your questions should be made available without having to ask, either via a website, a welcome package sent in advance of your appointment, during your meeting or a combination of all…… there can never be enough transparency. The tone, quality and level of detail in the responses will make it relatively easy to determine the level of competency of the person you are speaking with. Here is a short list of important questions often missed by prospective clients, that should be coupled with the standard questions we often read and hear about. These questions should also be part of review meetings with current advisors. If he or she is not addressing these questions voluntarily, it is good practice to ask them on your own.
- Describe your firm: This should not be a platform to hear about how great someone is. You will want to know the number of associates and their skills. Is the firm a stand-alone or part of a larger company? The amount of assets they manage and the kind of clients they serve are important factors as well. Are they like you and who will help you if the advisor is not available? Ask how the business is run from a management and administrative prospective and what types of internal procedures are in place to provide a high level of customer service. It is also important to find out how the firm is going to protect your data and if they carry cyber insurance.
- Describe the technology you have invested in and how it can benefit me: Is the advisor focused on using the most up to date technology platforms? Outside of online access to view your accounts, are they using the most comprehensive financial planning, college planning and social security software? Do they provide outside account aggregation and budgeting software? What type of CRM platform do they use to monitor clients’ plans and set reminders for important financial events occurring in the future? When was the last time they upgraded their technology platform and are they staying up to date on new industry innovations?
- Describe your investment management philosophy and process: Dive into the underlying process and philosophy behind portfolio construction and investment selection making sure it is something that aligns with the level of risk you are comfortable taking. Ask if the advisor uses investment models and has access to an open architecture investment platform. This is when you should find out about what types of investments they use, the costs associated with them and if they are proprietary products. This question can often lead to complicated answers. If you think you may not understand the responses, I always recommend bringing someone with you who may, or remembering what was discussed and speaking to a knowledgeable person later. An important point to take away from this question is that complicated investment products often do not solve financial goals, but well-constructed financial plans often do!
- Where can you find information on the advisor prior to your meeting: Aside from referrals, websites, social media or personal relationships, clients can view the background and complaint record of a financial advisor on https://brokercheck.finra.org/.
Finding a good financial advisor is not easy, however when you do it is worth it!