Selecting a competent professional who can carefully listen to your needs, goals and provide some clarity, guidance and confidence is also a challenge. You may ask, “How do I find the right person to help in our situation?” The following are some questions to ask yourself and your potential advisor to help guide you to the right working relationship. Let’s start with some questions to ask yourself.
- The first step is to gain some clarity on your specific goals. “What amount of clarity do I have for my specific financial goals?” If you aren’t clear on what you want, it’s going to be difficult for an advisor to get you where you want to go. Thankfully, experienced advisors have tools and processes to help you envision your specific goals and specify them with names, time-frames and dollar amounts.
- Next, once you know what your goals are, “How do I verify if we’re on track to achieve any or all of those goals?” It’s always helpful to get a second opinion, and if the answer is I don’t know, then you know you’re on the right track in looking for help.
- Do I honestly have the time, energy, self-discipline, and expertise to take the actions necessary to act on all the details of my personal financial affairs? If the real answer is, not really, you can begin the process of looking for that trusted advisor that’s right for you.
Personality styles, financial planning philosophies, qualifications, and fee structures may vary widely and it is important to be well informed about your choice in a financial professional. When interviewing your current or a potential wealth manager, start by asking the following questions….
- What services does your firm offer? If all they offer is investment management, they are likely going to be laser-focused on your investment returns, and will probably not look at your insurance needs, estate plan, asset location and titling, etc. If they offer financial planning, or wealth management, they are going to be more focused on every aspect of your financial life, align your goals with strategies designed to help achieve those goals, and guide you along the way towards achievement of those goals.
- What is your investment management process that you follow to make sure that my (our) portfolio is allocated properly given my (our) particular goals and concerns? Ask them to show you how they manage their portfolios, how they do their financial planning, what a typical meeting looks like, and how they follow up with their clients. Look for someone with a disciplined process, where you know what to expect and are comfortable with the level and quality of service provided.
- How are you compensated for your services? Are they commission-only, getting paid only when they recommend a transaction, or are they fee-based, which tends to eliminate many of the conflicts of interest inherent with some commissioned transactions? You want an advisor whose recommendations are based on your goal attainment, not their bottom-line.
- Do you have the credentials and experience to do all the work in- house? Obviously, you’d want to deal directly with the local advisor and their team; preferably not have your important information be discussed with someone “in the home office” that you’ve never met before.
There is one question that is more paramount than any of the above: Do I trust them? Ask your friends & family for recommendations, but ultimately you have to be the one comfortable with them. This is a relationship that you should be entering into with the expectation of working with this person for the rest of your days, possibly into future generations.