1. What do I need?
Ask yourself this question before you pick up the phone to make that first appointment. Knowing yourself and what your current financial situation calls for is a good first step in determining how an advisor can help.
“If clients really understand who they are, what their profile is, what their specific needs are, I think the questions flow much better,” says Kate Kelly, president and CEO of Minnesota Bank & Trust.
Giving careful thought to both your current and future goals will also give your advisor a clearer picture of how best to serve you. If you’re not sure what to expect, or even where to start, ask.
“I always give [referrals] a clear idea of what’s going to happen so they can prepare themselves and get the most out of that first meeting,” says Kyle Watkins, CFP, a financial advisor and executive officer at Focus Financial in Apple Valley.
2. Who is your typical client?
This is one of the first questions you’ll want to ask a potential financial advisor. The answer will help you determine where you’ll fall on the priority list as a new client.
“You want to know if they fit within your demographic,” says Watkins. “You may have an advisor who is really good at what he does, but if you fall in the low end of his typical client range, the concern might be you won’t get as much attention as you would like.”
To get an even better sense of how an advisor will handle your portfolio, Kelly recommends asking a few follow-ups like: With whom would I be working most closely? Am I an aberration in your portfolio? To what tools and expertise will I have access?
“You want expertise, tools, and resources around your segment,” she says.
If the advisor doesn’t seem to get the questions, starts pushing you too quickly to a one-size-fits-all product, or seems generally focused on a client base outside your demographic, it may be a sign he or she isn’t the best fit.
3. What can you tell me about your team?
A good financial advisor likely isn’t flying solo.
“While the financial advisor will be that main point of contact, you also want to know that this person has a good support team behind them who is experienced and responsive,” says Todd Senger, Minnesota market president for BMO Harris.
At BMO Harris, the team approach involves bringing together experts across the financial spectrum, including banking, investments, and insurance.
“In addition to support professionals who work with the financial advisor, we also pair our financial advisors with a banker so they can take a complete, 360-degree view of the client’s financial picture,” says Senger.
Wells Fargo Private Bank’s financial planning model also relies on a team approach. “It starts with understanding clients’ goals and objectives, that holistic approach to meeting their needs,” says Michael Maeser, senior vice president and regional managing director at Wells Fargo Private Bank. “From that level of understanding, we’re able to surround clients with a team of specialists who can address their entire balance sheet to develop a customized wealth plan for that client.”
To better understand a financial advisor’s team (or lack thereof), Maeser recommends digging deeper: “The real question is, based upon a client’s goals and objectives, are you able to integrate other areas of wealth to bring me a comprehensive delivery, which includes banking, investments, insurance, planning, and fiduciary services?”
4. How will you help me discover and meet my goals?
While it’s crucial to know, generally, what your needs are when approaching a financial advisor (see question one), if you knew everything, you wouldn’t need an expert.
“There are probably clients who don’t know which questions to ask,” says Maeser. “They don’t know what they don’t know.”
Maeser says clients in this position could be prone to only receiving a one-dimensional delivery that supplies them with products and services, but doesn’t actually address or fulfill their financial goals and objectives.
Advisors using a goals-based planning approach will take time to listen to your current and future financial needs. They’ll draw out your specific goals for your money and how you want to use it the future. They’ll also provide a clear process for how to get you there.
5. How will you work with me?
It’s good to know upfront the amount and type of communication you’ll receive from your advisory team.
For example, how many touches you can expect throughout the year and from whom (advisor, client services, investment specialists), what access you’ll have to planning tools, and the frequency of communication materials.
“The reason you engage a financial advisor is not only for their expertise, but because you just don’t have the time to do it yourself,” Senger adds. “You have to have faith and confidence that the financial advisor is doing that every day for you.”
6. Do you have references?
“Talking with someone who has real-life experience with the potential financial advisor can provide valuable insight into how the financial advisor interacts with clients,” Senger says.
He recommends asking for references in the same stage of life and with financial goals similar to yours. Ask how quickly the advisor responds, how available his or her team is to clients, whether the advisor takes time to listen and answer questions, and whether the financial plan in place has worked over the long term.
Glowing reports from references can give you confidence in moving forward with a financial advisor. On the flip side, you may hear something—even in a positive report—that doesn’t quite fit with your needs or personality.
Senger also advises asking references to recount a time when they worked with the advisor and the advice or recommendation didn’t work out. This will help you understand how the financial advisor responds to difficult situations.
7. Do we get along?
Sometimes, it’s the simplest questions that can provide the greatest clarity.Ask yourself this question after your first meeting with a financial advisor to gauge how well your personalities and communication styles mesh. Other smart questions to ask yourself post-meeting: Did this financial advisor take time to listen and respond to my questions? Was the conversation comfortable and free-flowing? Is this financial advisor someone I can trust?
“It’s no different than if you were on a first date,” Senger explains. “You kind of know whether the personalities are going to fit. Is the person sitting across the table from you someone you can definitely see yourself building a relationship with? Or, is it someone who you’re having a difficult time relating to?”
Personal chemistry likely won’t be the defining factor in whether you work with a financial advisor, but if you find you’re clashing from the get-go, it’s probably a deal breaker.