How to Have a Successful First Meeting with an Advisor

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Pam Krueger: CEO of WealthRamp Jul 21st 2017

It’s tempting to lean back and let the expert drive the very first meeting. I recommend that you take the lead.

Here are some key questions that will get the conversation started and keep it moving in the right direction without any awkward moments.

1. Start off by getting to know each other. Ask how he got into the advice business and where he spent his first few years. You want to find out what he enjoys most about the business. Ask how long he’s been in his current role and whether his firm is affiliated with a brokerage firm. Does he have a broker’s license? If so, you’ll know his role is as salesperson, not as a registered investment advisor.

2.  Ask if he AND his firm accept full fiduciary responsibility and will he be able to put that in writing?

3. Assuming you’re meeting with an Independent Registered Investment Advisor who is not employed by a broker, ask which discount brokerage firm he uses as custodian for your funds, such as Schwab, Fidelity or Scottrade. The advisor’s goal should be to keep your expenses and transaction costs down. Ask which custodian he tends to use most and why?

4. Ask him to walk you through how he is compensated. Is it by the hour or plan, or on retainer, or as a percentage of the invested assets you have? (typically 1% per year). Ask if he receives any kickbacks or commissions at all. (I like to avoid double-dipping). What you’re trying to do is make sure that most, if not all his compensation comes from you, and not from someone else. That way, you know he’s working directly and only for you.

5. Ask what his typical clients are like and what they expect to get from him. Sometime advisors specialize in certain areas of expertise or wind up attracting clients from one profession, such as tech engineers or surgeons. Most advisors have a broad cross-section of ages, and some are focused on college planning, while others are already in retirement. It’s good to get a sense of what kinds of clients he tends to work with and how he interacts with them.

Now it’s your turn. If you like what you hear, then you can feel more comfortable knowing that you’re working with someone who cares about your financial wellbeing and is rowing the boat in the same direction as you. If not, it’s a good moment to shift gears and quit the meeting before divulging too much about your personal finances.

Assuming you want to continue, at this point in the discussion, I’d be open and very frank. Start off by talking about your circumstances, your goals and what you worry about most. Outline a couple of scenarios in which you can describe what you’re really trying to accomplish financially and what you fear could hold you back. Talk about how comfortable you are with investing and whether you want to interact often enough to learn more and collaborate. On the other hand, you might also decide to take a more hands-off approach. Talk about how involved your spouse is in these discussions. Explain your investing decision-making process to give your advisor a good sense of how you approach investing.

From there, you’re off and running. You’re going to save yourself a lot of time and aggravation by running the meeting this way, starting with the interview questions, rather than if you simply sit back and let him pitch to you.

Comments

This is such a great overview to help get to know an advisor. I've felt intimidating with their expensive, cushy offices, but it would be good to put them on the defense for once

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