“Alone we can do so little, together we can do so much.” –Helen Keller
Working with a Fee-Based Financial Adviser can be one of the most important relationships that you enter into. You will share your financial goals and dreams, specific details about your current situation, and place your trust in someone to help you get from your current situation to your end goal.
In my opinion, it is important that you view working with a Financial Adviser as entering into a relationship, rather than a transaction. Get to know them as a person, ask the right questions, ensure that you’re comfortable with who they are and their values.
Having met with many prospects and clients over the years, I often get asked a wide range of questions, from my charges to recommended investment strategies. While these are important questions, I see that not enough people focus on the ongoing relationship. Therefore, I’ve outlined 6 key questions that you should be asking a financial adviser when meeting with them.
1. What are the typical demographics of your client base?
It is important that you ask what the typical demographics of the Adviser’s clients are. Are they a similar age to you? Couples or individuals? Young professionals or closer to retirement? High-net-worth executives or Small-business owners? If the typical demographics do not match your own situation, then perhaps that Adviser is not the right fit for you.
2. Can you tell me about an example of a prospect that was not a good fit?
This question can reveal two very important aspects about the Financial Adviser to you.
Firstly, by asking your Adviser to share an example of somebody who was not a good fit for them, you can determine whether you would also fit that category. Secondly, it can also reveal whether the Adviser you are meeting with is focussed on product sales or long-term client relationships. Is the adviser selective about who he/she works with and takes on as clients? If not, then I suggest it’s time to walk out the door and find an Adviser who is.
3. How many clients do you have and do you have a maximum number?
The most important asset that we have in this world is our time. There are a finite number of hours in the day, days in a week, weeks in the year, and years in a lifetime.
This question should indicate to you how much time an Adviser will be able to dedicate to meeting with you, taking your calls and reviewing your investments.
For example, let’s assume an Adviser works 50 hours per week for 48 weeks of the year, which equates to 2,400 hours per year. If an Adviser has 500 clients, this allows him/her to spend 4.8 hours per year looking after you, or 6 minutes per week.
However, if an Adviser caps his/her client number at 80, this allows him/her to spend 30 hours per year looking after you, or 37.5 minutes per week looking after your own individual finances.
4. What do you do outside of work?
Find out about what activities your Adviser is involved in. Is he/she involved in team sports or charity work, or do they have a particular passion for rock climbing, or adventure sports. This can not only highlight whether you share common interests, but more importantly it can reveal what sort of person they are. For example, being involved in charity may reveal a true underlying passion for helping others.
5. Can you tell me about your own personal financial situation?
If you plan to trust someone to look after your own finances, wouldn’t you want to know what their financial situation is? If they have un-sustainable debt levels, no retirement savings and uncontrollable spending habits, would you really want them as your Financial Adviser.
I am always happy to be very transparent with prospective clients when it comes to this question. It is important that we ‘practice what we preach’ and take care of our own finances. If an Adviser is not willing to share anything about their financial situation, then I’d suggest it’s time to leave that meeting and find a more transparent Adviser.
6. How long are you planning to be in the business?
If your Adviser plans to retire in 2 years and is currently discussing your 30 year investment strategy, then it probably isn’t an ideal fit. By working with an individual Adviser over the long-run, you will find that your relationship continues to strengthen and they will continue to find ways to help you achieve your goals.
The answers to your questions should make you feel at ease. Over the years, as you work together to achieve your financial goals, you will need to be comfortable with both their investment philosophy and overall expertise.
Ask the right questions, Get the right answers, And form a relationship with an Adviser that will be mutually beneficial throughout the years to come.
To Your Financial Success!
Jarrad Brown is an Australian-trained and qualified Fee-Based Financial Adviser with Australian Expatriate Group of Global Financial Consultants providing specialist financial advice and portfolio management services to international and local professionals in Singapore.
Book your complimentary consultation with me here.