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Retirement planning, saving for your child’s education, finding the best way to own your dream home, leaving a legacy…these things all require planning. But knowing that you need plan for these things and finding someone you can trust to guide you down this path are two different things.

People change advisors for many reasons but they almost always stem from a communication breakdown. But, with a careful interview process, you give yourself a much better chance to find a professional that will help you make the best decisions on saving, investing, and wealth management for the short and long-term. So, how do you get there?

Why You Should Interview a Financial Advisor

When meeting with an advisor for the first time, you’re looking to answer one question: Are we a good fit? But how will you be able to tell if you’ve found the fit you’re looking for? Just as each client situation is different, each advisor is different. Having an interview game plan is the best way to get the information you need to find the right advisor for you.

6 Key Questions to Ask an Advisor

Before committing to a financial advisor, you want to make sure you’ve found the best person for you and your situation. Here are six questions to ask during that first meeting to help ensure you’ve found the right advisor for you.

  1. What is your approach to financial planning?

Not all advisors take a similar approach, so this question is vital. Are they a single-topic advisor? Many advisors focus on one aspect of financial planning, like investment management or insurance planning

Or are they a comprehensive advisor that will walk you through a process of setting measurable goals? One that will help you evaluate where you are, look at multiple options for ways to get to where you want to be, and then choose the one that’s best suited for you. A comprehensive plan should address all aspects of your life from the bank account to the estate plan.

  1. How will we work together?

It’s also essential that you determine how you will work with your advisor and how you’ll pay for their time. Some advisors work on an hourly or project rate and leave the work of implementation and oversight to you (Best for Do-It-Yourself folks). Others work with you to build a plan and proactively help keep you on track and coordinate your strategies. Most of these advisors charge an annual percentage of the investments they manage for you and are on your team year-round.

There are pros and cons of both types – do you have the time to manage your finances yourself? Or do you want a team to help keep you on track and coordinate all your finances with your life priorities? Either way the answer to this question is key.

  1. Are you independent?

This is important because too many advisors are also tied to certain companies while others are can help you hire (or fire) strategies any time it fits your plan because they aren’t tied to a financial company. Ask the advisor if they are an independent advisor that can select from multiple companies without bias of one company or another?  Or if they work for a company that has a predetermined set of things that you’ll have to choose from?

Advisors who are held to a legal fiduciary standard are those who are held accountable to act in the best interest of you, the client.

  1. Can you tell me about your qualifications?

Anyone can label themselves a “financial advisor,” which is why you need to ask this question.

Beyond that, there are a lot of designations out there and they aren’t all the same. One that we would encourage people to seek out is the Certified Financial Planner™ (CFP®) designation. In the world of financial planning where a title doesn’t always help you understand particular experience or expertise, the CFP designation is earned by advisors who have demonstrated a thorough understanding of comprehensive planning, meaning they have studied individual parts of financial planning and have demonstrated proficiency in bringing those together in a single plan. A CFP is also held to a fiduciary standard for all clients, so in addition to their holistic planning experience, they’ve also committed to acting in your best interest. For a deeper dive, read our article “What Is a CFP and Why Should You Care?

  1. What types of clients do you work with?

Ask this question because it will help you determine if an advisor has experience working with people like you. If they say, “I exclusively work with this type of client,” and you don’t fit that picture, you’ll immediately know that you haven’t found a good fit.

If you do fit their client profile, you can take things even further with some follow-up. For example, ask them to give you an example of a time when they’ve helped a similar client make progress or achieve financial goals. If you’re unsure, you should feel comfortable asking questions related to your situation. By this point, if you’re not comfortable talking about details of your life with this person, you likely haven’t found a good fit anyway. Otherwise, since you’ve made it this far in the interview, these questions can help.

  1. Why do you do this work?

Many of the questions that you’ve asked up to this point focus on the technical aspects of financial planning and the services offered. But this one asks the advisor to peel back the curtain a bit and tell you more about themselves on a personal level.

In professional relationships like this, we find that these are also personal relationships. So, if you get a picture of “why” they are drawn to this profession, it can help you understand that person a bit more.

This may not be important to everyone. Some people just want to know that their financial advisor has the technical chops to get the job done. But, having some understanding of that person can be helpful, especially since they could be looking after your financial future for 10, 20, sometimes 30 years or more!

What Should a Financial Advisor Be Asking You?

When you meet with a financial advisor, it should be a two-way conversation. If you walk out at the end and find that one person has done all the talking, this might be a red flag. The right advisor will want to learn more about you, your attitudes about money, and your goals.

One of the questions we’ll ask you is, “When you think about financial planning, what types of things do you envision an advisor doing for you?” Because we are comprehensive advisors, if someone says, “Well, I’ve got my plan pretty much dialed in. I like doing that on my own. I just need some technical feedback on an investment portfolio,” they are telling us they aren’t a good fit for our firm, and we can likely recommend another resource. On the other hand, if they say “We’re looking for someone to help us retire successfully and make sure we’re coordinating our tax, investment and estate planning strategies”, we know they’re looking for a team like ours.

A Follow-Up Question to Ask Yourself

At the end of your meeting, ask yourself, “How do I feel when I speak with them?”

If you feel uncomfortable, intimidated or confused, that financial advisor may not be the right choice. But, if you are excited about moving forward, have a level of comfort, and want to learn more, it’s worth exploring this professional relationship further.

Final Thoughts…

When people are surveyed about the reasons they walk away from a financial advisor, it generally doesn’t have much to do with their fees or an underperforming portfolio. Instead, it’s usually something related to a lack of communication or mis-met expectations. We frequently hear, “I didn’t know when we were supposed to talk”. And, “I didn’t know what we were supposed to talk about.” So, it becomes important to establish that your financial advisor understands your situation and the precise nature and scope of your relationship at the outset.

When you connect with someone who can demonstrate a framework for your financial plan, you’re on the right track. Specifically, you’ll want to hear your new financial advisor tell you

  • “Here is how we will keep that up to date.”
  • “Here is when you should expect to hear from us next and what we’ll discuss.”
  • “In between those checkpoints, if you have a question, we’re here to help!”

Money matters are personal, and our goal is to establish strong and long-term relationships with clients built on a foundation of trust and results.

Alterra Advisors - Josh Whelan

Josh Whelan

CFP®, CLU®, ChFC®
Partner, Financial Advisor

About the Author

Josh sees his profession as a calling, not just a career. His motive for pursing financial planning was very personal. While working on a degree in marriage and family counseling, Josh’s father was diagnosed with multiple sclerosis. Josh decided then and there to change career paths to help his family prepare for an uncertain financial future. Financial planning became his path to serving others.

Josh applies his passion for personal relationships and helping people thrive as a financial steward. His “listen first” approach seeks to understand his clients’ true financial goals and then offer the open communication and guidance needed to reach those goals.

A native of the Pacific Northwest and a graduate of Seattle Pacific University, Josh serves many kinds of clients, but has established a niche helping dentists integrate their personal and practice finances. He’s also a regular lecturer at the University of Washington School of Dentistry, helping the school integrate financial education into the curriculum.

The “Alterra” name was coined by joining the Latin roots “alter”, the origin of the word “altruism” with “terra” meaning earth or land. This name reflects the company philosophy of “clients before profits” and providing firmly grounded advice.