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Who is in control when you interview professionals? If you are like most investors, it’s the financial advisor. They use sales and relationship skills to provide information that makes them sound like competent, ethical financial professionals. It may take years before you realize the advisor you selected was not the expert he or she purported to be. But, by then it is always too late.
The problem is, when professionals control interviews you only hear what they want you to hear. When you control the interview topics and process, you obtain the objective information you need to select a higher quality financial professional. Gaining control benefits you.
Control of the interview process starts with you answering the following questions:
- How many professionals do you want to interview?
- Where will the interviews take place?
- What questions do you ask during the interviews?
- How long will the interviews last?
- How do you minimize subjectivity in your selection decisions?
- How many interviews do you conduct before you make your selection decision?
- What information do you require in writing?
Your answers to these questions create an objective interview process. But sticking to this process may be tougher than you think. That is because most professionals use their sales and relationship skills to wrest control of the interview process away from you. Why do they want control? Control allows them to talk about topics that benefit them and avoid topics that expose their weaknesses. Meanwhile, your goal is just the opposite. You want to identify weaknesses so you can avoid selecting a lower quality advisor.
Number of Professionals
You definitely want choices when you interview professionals. This means you must interview at least two, but a better number would be four. You hope the best advisor will standout so he or she is easy to identify and select. At the same time you hope the weak advisors will be easy to identify and avoid. But, it is rarely this easy. You are up against advisors who know how to tell you what you want to hear and they know how to avoid talking about weaknesses that would cause you to exclude them.
Interview Location
You can meet at your location for the first interview. That way you don't waste time travelling to the locations of professionals who are not serious contenders. You should schedule the second or final interview at the advisors' locations. You can learn a lot by meeting at their locations - for example, the size of the office, the number of staff, the professionalism of the staff, and other observations that help you determine the quality of the advisors.
What Questions do you Ask?
Your most important step is to prepare questions and ask each professional the same questions. Your questions should focus on the professionals' sources of expertise (education, experience, certifications), their ethics (compliance record, conflicts of interest, disclosures), their business practices (compensation, reporting, accessibility), and their services that help you achieve your goals. It is easy to compare professionals to each other when you ask them the same questions.
Length of the Interview
You can learn everything you need to know in a one-hour interview. Give the advisors 40 minutes to cover your prepared questions and 20 minutes for questions that occur to you during the interview. The more condensed the time period, the more pressure there is for professionals to provide short, focused responses to your questions. If they don't answer all of your questions, they run the risk of being excluded from your search process. You are also limiting the amount of time they have to use their personalities and sales skills to influence your selection decision. You want to select the best professional and not the best sales person.
The Risks of Subjectivity
Your biggest financial risk is selecting a low quality professional who provides bad advice or sells bad products. And, the more subjective your selection process, the bigger this risk will be. For example, you select advisors for their personalities, the name of the company they work for, or they were referred to you by someone you like or trust. None of these reasons have anything to do with the professionals' competence, ethics, or business practices. You must focus on objective criteria that impact the advisors' ability to help you achieve financial security.
Number of Interviews
You should never select an professional after one interview. There is too big a risk you will select the professional who sounds the best or the one you like the best. At a minimum you should have two interviews. The second interview is the finals and you should use it to check first impressions and to gather additional information. If you are like most consumers and investors, you will always have a few questions you wished you had asked during the first interviews. The second interview gives you that chance. You may want to use a 4/2/1 strategy: four initial interviews, two final interviews, and select one professional.
Documentation
Professionals must be willing to put all information, that you rely on to make your selection or buying decisions, in writing. They should provide this information before the first interview so you can review it and develop any questions you might have. You may ask for additional documentation after the interviews so you have a written record of everything that was said to you. |
