You’ve determined that now is the time to enlist the help of a professional for your financial affairs, now what? It’s a good idea to find a few advisors and interview them to see if they are the right fit for you. This will be an important relationship and you want to be able to trust this person and feel comfortable talking about important subjects like money and personal goals. Here’s a good list of questions to ask during your interviews:
1. What are your most important values?
It’s important to know what matters the most to your potential advisor because you can then gauge if their values fit in with your own. If the candidate can’t answer this question then that’s an indicator that they might not be the right fit for you. Someone who is in touch with their values is also more likely to act in ways that support your own values.
2. What is the one thing your clients say most often about you?
This may trip up your financial advisor candidate because maybe they just don’t know. A good advisor should be in touch with how their clients feel and what good or bad things they have to say about them.
3. Can you tell me about a time when a client wanted to make a financial decision that you didn’t think was in their best interest? How did you handle that?
This question will help them open up about how much they are willing to stick to their guns when a client opposes them. It’s important to know that your potential financial advisor can not only help you make the right financial decisions but also illustrate to you how a potential “bad” decision could affect your particular situation. A good advisor should be able to explain why a particular decision could put a client in financial jeopardy.
4. Can you tell me about a situation in which you made a mistake dealing with a client? How did you handle that?
This type of question may make the candidate uneasy, and that’s OK! Watch for nonverbal behavior, which can tell you a great deal. You want your advisor to be honest and work with integrity, and this includes owning up to making mistakes and doing what is necessary to fix them.
5. Tell me about how you handle your working relationship with your most difficult client. What do you do that’s different from how you act in your relationship with your favorite client?
This question will help you determine if your potential advisor is willing to do what’s best for you regardless of personal feelings. Not to say that you’ll be the most difficult client for them, but this can also help build trust, the cornerstone of a solid relationship with your advisor. You want to know that they treat all their clients equally.
6. What services do you personally provide that I might not expect from another advisor?
Not all advisors provide the same services to their clients. If you are looking for specifics like help with financial planning, personalized service, education, or having a team approach then you might have to ask about those services specifically. If they do more for their clients, they will want to illustrate that to you.
7. How do you help your clients track their progress towards their financial and life goals?
This is a particularly good question to ask a potential advisor, especially since not all financial advisors do financial planning. This is an integral part of having a complete picture of your financial situation and your financial plan should be updated regularly. Your goals and dreams may change and you need to be sure that you communicate that to your advisor. In turn, they should continuously work with you on updating your plan when needed.
8. Can you tell me about a situation in which you worked with another professional inside or outside your firm to help meet a client’s needs?
Your financial situation might involve more than one professional, such as an estate attorney or an accountant, and it’s important that your financial advisor be a part of your financial team. They should open the lines of communication with these professionals so that all of your needs can be met. Or if you don’t have these professionals already in place, they should recognize this and refer you to a reputable professional.
9. How have you personally responded to market volatility, and how have you communicated your thoughts and feelings about market volatility to clients?
The volatility of the market can be stressful and not hearing from your financial advisor can make it even worse! A good financial advisor should educate you on the steps they are taking to protect you and your assets during uncertain times.
10. What kind of return can I expect if I asked you to manage my investments?
No financial advisor has a crystal ball, however they should be able to speak to market trends and set realistic expectations for the return on your account. Your expected return should be based on what is needed to achieve your financial goals, set forth in your financial plan.