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Investing is a personal activity. There is no “best” choice. There’s only the choice that’s right for you.

If you decide that an investment/wealth/financial planner is right for you then you’re going to want to interview them just like you were hiring to come to work for you. The truth is, you are.

Do you like this person?

I would always start here. If you don’t like the person you’re thinking of hiring I have a question for you…..why would you ever do that?

The person you choose as your investment advisor is one of the most important advisory choices you’re ever going to make. You better make sure that it’s a person who you feel an affinity for. Otherwise, it’ll be very tough for you to take their advice when the markets become volatile.

Do you think they understand you as a person?

This is a sub-part of the above question. You want to make sure that your investment advisor understands your motivations, wants and needs.

When you first hire an investment manager you’ll likely be in the accumulation phase of your life. Later, you’ll be using your money. Your advisor better understand how your needs fit with how you want to use your money.

Do they ask you good questions?

I find this is the key to choosing any advisor. If they aren’t asking lots of questions it might be a good idea to pass and move on.

There are lots of really smart people in the world who don’t know how to ask questions. Your investment advisor needs to understand you or there is almost no way for them to make good recommendations.

Are they good listeners

Asking good questions is not enough. If the person you’re considering doesn’t also listen well then all of the good questions in the world don’t matter.

I want you to make sure that you feel you’re being heard. If not, move on.

If you’re in a relationship do they talk to both members?

I see this too often. A couple visits with an investment advisor and the advisor just talks to one of the members (often the male). If you find this happening, you’ll probably want to find someone who pays attention to both of you.

If you’re in a relationship money can be a charged activity. You want to make sure your investment advisor understands this and talks with both of you……meaning they need to ask questions and listen to answers from both of you.

Did they talk about how fast they respond to your questions?

You want to make sure that your investment advisor knows your time frame and urgency for a response from them. The last thing you want is to have your investment advisor take four or five days to respond when there is market volatility.

How does the person your considering manage investments?

Some firms make decisions about what stocks, bonds and cash to buy and some firms make decisions about asset allocation and find best in class managers to help manage your money.

In our firm, we’ve decided it’s best to partner with more appropriate investment managers. We believe it’s our job to help with the planning side and we work collaboratively with outside managers to help you invest in a manner that fits in with your risk profile and can provide a solution that fits your wants and needs.

What is the person’s view of the macro-economic environment?

Warren Buffet likes to say, “The market in the short term is a voting machine and in the long term a weighing machine.” This means that knowing what’s going on in the larger economic environment is important.

If you want to try and time the market (something I don’t recommend) then, you don’t want an advisor who focuses on the short term. Either way, make sure you know what’s important to you and then make sure your advisor agrees with your world view.

Does your investment advisor think they can beat the market?

Some advisors actually believe they can beat the market. Then there are others who’s goal is have you not underperform the market.

I’m betting that you think both are pretty much the same thing. They’re not. Your advisor may take additional risks with your money that you may not be comfortable with.

What kind of experience do they have?

In most cases you don’t want someone who just started in the business. I can tell you that when I first started I made mistakes that I just wouldn’t make today.

You also want to make sure you’ve found out what kind of mistakes your advisors have made and what they’ve learned from the mistakes. If the advisor you’re considering can’t give you a good answer to this, it might be time to pass and move on.

Do you think you can trust them?

This is the big question and it probably should have been at the beginning of this post. If you can’t trust your advisor, then you need to stop right there.

Trust is the most important thing you can bring to the party. It’s what’s going to allow you to listen and consider advice that’s given.

Why don’t you let me know what you think about investment advisors you’ve hired. I would love to hear your stories. Just click here and you can be sure I’ll answer your email.


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Topics: Investment advisors, hiring investment advisors

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