You start the interview process by requiring documentation from advisors that confirms their credentials, ethical histories, business practices, services, compensation, and other information that is important to you. The next step is to meet with three to five advisors and select the one that has the highest probability of helping you achieve your financial goals. Sound easy? It's not.
You should consider interviewing advisors as a competition. You win if you select the most qualified advisor. You lose if you select the advisor with the best sales skills. Lower quality advisors will use a variety of deceptive sales tactics to gain control of your assets including: free lunches, exaggerated claims, omissions, and misrepresentation. They don't make any money if they come in second.
You have to get past the sales tactics to get to the information that impacts advisor competence and integrity. Which advisor is the most knowledgeable? Which advisor is the most trustworthy? Which advisor has the highest probability of helping you achieve your financial goals? Hint: It is not the advisor with best personality, the best sales skills, or the biggest claims about future performance.
You should always interview several advisors before making your selection decision. Your financial future is too important for short cuts. You will go through a learning curve when you talk to three, four, or five advisors. For example, you will begin to identify critical differences between them: Which advisors are CFP®s, which advisors have the best planning solutions, and how much the advisors are compensated for their knowledge, advice, and services.
You must be in control of the interview agenda. When advisors control agendas you hear one sales pitch after another. And, because each pitch is different, it is difficult to compare their answers. You will make a better selection decision if you ask the same questions. Then it is easy to compare responses.
Develop a list of questions and send it to the advisors a few days before the interview. Advisors must respond to every question. Did the advisor show-up prepared? Did he communicate in a clear, understandable fashion? Did he provide documentation that confirmed what he said is true?
You should limit the amount of time each advisor has for a presentation and answering your questions. 45 minutes per presentation and 15 minutes for questions is reasonable. Make sure they know about the allotted time in advance. It helps keep them focused.
You should use a two or three interview process. The purpose of the first interview is to screen the advisors. Let's say you talk to four or five advisors. Your goal is to reduce that number to the two finalists. The primary purpose of the second interview is to learn more about how they will help you achieve your financial goals. The second purpose is to narrow your selection to one advisor. Don't hesitate to schedule a third interview if you think you need one. This is one of the most important decisions you will make for your financial future.
