Financial Advisor Interview Questions
When choosing a financial advisor, the public faces some challenges they are simply unaware of. There is no standard solutions to any investment need!
To help people to find financial advisors, I have come up with four very simple questions that will give you a window into understanding advisor biases. I’m going to recommend you ask them face-to-face. Making bad choices here can cost you thousands or even tens of thousands of dollars, so take your time, ask the questions, write down the answers and compare them.
What are the last few continuing education courses you have taken?
You will learn two things, first, what are they are certified, or licensed to do and second, where their interests lie.
The next thing you want to ask is, do they have investments minimums.
Different firms have different investment minimums. One reason is obvious. If you’re working with a big bank, pretty office buildings and nice parts of town there’s overhead with that expense. It is ultimately paid for by the customer.
The other reason is because different firms have different target markets. So, if what you have to invest is lower than their minimums, recognize that’s not a good match for you.
What is the normal contact cycle or routine and what do we discuss in those meetings?
The first thing that is going to drive that contact routine is the most likely the complexity of your situation. If you have a one hundred-thousand-dollar IRA and you only talk once a quarter, that is fine. Now going to “what do we discuss” portion of the question, you ought to be discussing maybe a little about markets and your accounts, but you ought to be discussing tax issues, estate issues and to leverage their network of experts in other areas.
If you have a complex base of assets: Trust accounts, individual accounts, IRA’s retirement plans, even rentals and a side business–that should increase the frequency of your discussions, because there is a whole range of things to be talking about and the discussion ought to be relative to your entire set of financial circumstances.
There are a few other things that are going to dictate how often they are willing to talk, the first one is their staffing. This is a paperwork intense industry so if they have minimal assistance, means they must do the paperwork, and they don’t have much time to talk to clients.
How many clients do you have, and what are your assets under management (AUM).
Now, when you ask this question–preferably face-to- face–if you get a blank stare or they say “I don’t even know,” be very cautious. Either A) they really don’t know if so they are very disorganized and I would question the relationship or B) they know but they don’t want to tell you. Why don’t they want to tell you because if you get a sense of their assets and their number of clients and you just simply divide one number into the other you are going to discover their average client size.
