The secret of interviewing a potential financial advisor

Sean discusses the super secret question you should ask any potential financial advisor. In fact, it's so secret, he mentions it 20 seconds into the episode! 

Transcript

Sean 0:00

Okay, one of the things that people get intimidated by is knowing what questions to ask if you're trying to find an advisor or considering if you need an advisor at all. So the single best secret question that I think you should ask an advisor, a potential advisor, is what questions are you going to ask me? So it's not really a secret, but the reason that could be so powerful is if you ask that in advance, you can request a list of questions from someone to say, hey, send these to me ahead of time so I'm ready to answer them. And that will also do a lot of things. One, it will give you a sense of how prepared someone is with the process, how structured it is. Being very structured might be good. But if you're not someone that likes structure, maybe a more conversational approach is okay, but it's good to know ahead of time. If you're an engineer-minded type person or kind of nervous if someone doesn't follow a specific process, if you ask someone that question, uh, hey, what questions are you going to ask me and provide the questions before our meeting or conversation, and they can't or won't do it, that's probably saved you some time and energy. So getting a sense of what questions they'll ask you is is huge just in how someone responds or doesn't to that question. In addition, the types of questions they they say they're going to ask you can tell you if they are very holistic in their planning and advice, or if they're very specifically focused on investments or on insurance or on a career planning or a business if you if that's part of your situation, or social security planning, or real estate. Whatever the list of questions they provide you or they ask you in conversation, that gives you a great sense of where someone's leaning. So I find that uh because I know this stuff inside and out and I like talking about it, I could probably observe an interaction with a potential advisor, and without knowing anything about what's been proposed or going down the road, we can get a sense of how thorough someone might be. So if someone, if you say, Hey, I have um I'm about to retire, I have a rollover from my my current or maybe former 401k. If someone says, I can help with that, here's how I would invest it, etc., without asking you a bunch of questions, that tells you they are very focused on uh investments or potentially insurance vehicles, depending on what kind of how they invest the money. But if they're not asking you a bunch of questions about how long, how much money you'll need out of there, your whole overall situation, a lot of background info, background info. There's not a lot of comprehensive planning. It's at least, or it's not first focused on the investments, which could be what you need and all you need, but that's good to know going in. And this is hard to assess if you're if you're a little uncertain or uncomfortable about asking questions. So a lot of what I aim to do is to help you feel more comfortable asking questions, um, or at least being okay, realizing that if you ask questions, even if you don't feel comfortable and you don't like the response, the the person on the other end doesn't make you feel like they're listening, that that's okay. Keep looking. There will be other advisors, or maybe you don't need one at all if you don't find the right person, but depending on your comfort level. But if you're nervous about the process, um be ready to say no, or at least not now, and keep looking for someone who you at least feel like, just like you would do with a doctor or other professional that you're working on such a personal thing, um, don't hesitate to keep looking until you feel there's connection and a fit. Um, that's not the only thing you need, but it but that fit and someone who's listening is is critical. So don't don't uh ignore those intuitions. So the number one question I would ask if I was looking for an advisor or coaching someone is what questions are you going to ask me? So then some of the questions that you might follow up with in that conversation are or maybe provide in writing or things like tell me about your process or what is your process like, which is similar to what questions are you going to ask me. Uh, what times of what types of things and areas do you help me with? Again, these are very open-ended, not yes or no. Because if you say, Do you help with uh comprehensive financial planning? Most people say, Yeah, of course I do. But if if you leave it more open-ended, you can let people define what that is. Um, because if if you say, what types of things will you help me with, and they say investments, insurance, retirement planning, um, then you could you can follow up with what does that look like? What kind of tools do you use? How would we work together? Um, can how can I how many people can you provide me, basically references or current or happy clients that you've worked with and helped? Um what makes a good relationship for you, Mr. and Mrs. Advisor? So that tells them who are they looking to work with? Because even if they seem great to you, but um they describe a situation that seems much like much more complex or much simpler, or with a lot more money or a lot less money than you have, um, that could throw you off. You don't probably don't want to be the smallest, simplest uh situation that you might not get the attention that you hope. If you're the most complex or highest net worth client, that could be great. You could get a lot of attention, but you want to make sure that the person is qualified and ready to serve you the right way as well. Uh, you can also ask, how do you charge for your services? Um, why did you decide to do it that way? Because there might be what I would call more old-fashioned ways, commission-based, etc., that um the reason someone chose that is because that's what was common when they started 15, 20, 25, 40 years ago. And so it might not be that they're necessarily choosing that uh compared to what else is out there. They chose it a long time ago when that was the main option. And I've seen advisors do a great job with what I would consider somewhat outbid outmoded, uh outdated business models. That probably happens in many professions in the world, where people are good at one thing and they stick to it even when it's not the best practice for newer professionals. Uh, what's your contingency plan? So hopefully you choose one if you talk to someone you hope they have a fairly successful established business where they'll be around. But if something happens to them, if they're unexpectedly disabled or pass away, who is gonna help you? Is there a plan in place? Doesn't have to be, but that's just good to know because that's that would speak to someone who's thought through all the risk factors for themselves and for you, more importantly, the risks to your ongoing help if that's what you're looking for in the event of an unexpected tragic circumstance for them. Um, you you can also ask what question should you ask, because that's that's a good catch-all. And then one last comment is don't be afraid to bring someone with you or have someone else involved in the conversation. Um, I see this a lot in my family. We have uh older family members that there's usually someone else, a child or a spouse or niece, nephew, that goes to doctor's appointments. I know a lot of people, that's common. To be your advocate, another set of eyes and ears. Not that we don't trust the professionals, the doctors, etc., but sometimes as we get older, it's hard to keep track of all these things. Remember and write things down and make sure the doctor knows of all the different circumstances regarding the patient, right? So it's a lot easier to be objective if it you're if it's not your life, your health, your money. So if you're especially if you're all uncomfortable and don't really enjoy the process, bring someone to be your eyes and ears. Uh, even if you don't think your family member, friend, trusted uh contact that come with you, even if they aren't an expert, they can provide another uh uh perspective. And so if you ask a question and the and you think you get a good answer, but your your your friend, family member says, I didn't really like the way they answer that, and they seem like they they weren't uh respectful of you and they seem to talk down to you, or I thought they were great, that would help kind of balance out your decision making. Um, and a lot of times, I think a sucking set of eyes and ears can sort out or pull out if someone a professional is threatened or defensive, or because hopefully someone's gonna say, Well, okay, tell me about the relationship. What how can I help best include this person? And uh a little bit of more uh shining light on what what you are gonna go through should not be a bad thing. Um, certainly there's privacy concerns that we have to be careful of in terms of sharing information, but if you've authorized this person to come with you, not a big deal. So uh that is all I want to get out, and I'm gonna try to be more consistent with sharing case studies, ideas, and um again, I'm a practicing advisor, but I'm happy to help you go through the process of choosing an advisor or sort out your circumstances. So don't hesitate to reach out. And just remember the number one secret question that you can best get to qualifying or disqualifying an advisor in the process of looking for that fit is what are the questions that I should ask you, Mr. and Mrs. Advisor? Thanks, and we'll see you next time.