Your Script for Interviewing a Financial Advisor

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I’ve said it before and I’ll say it again: doctors have doctors, shrinks have shrinks, and financial advisors have financial advisors— including yours truly! I am bullish on money tips (duh!) and when it comes to financial literacy, I say: the more, the merrier. That’s why I highly encourage all Money Minute readers to have their own financial advisor.

To help you swipe right on the right financial advisor, here's a script you can use while interviewing:

Lights, camera, action!

You say: Hey, Miss. RIA, before we chat further, can you please confirm if you are registered with the state or the SEC?

They say: Well, yes, I am. I also have an investment advisor representative (IAR) who works with me and also abides by strict fiduciary practices.

You say: Great! And how does your compensation structure work?

They say: I take a 1 percent fee of all your assets under management.

You say: Do you take fees for buying mutual funds? Or 12b-1 (marketing) fees?

They say: No. Our 1 percent fee is the only fee, and we do not participate in any “pay-to-play” fees as compensation.

You say: Wonderful. So, to clarify, you don’t receive compensation for trading any stocks or bonds?

They say: That is correct!

You say: This is really important to me, so I want to make sureI’m making the right decision, so thanks for answering these questions. I only have a few more. Do you have any affiliation with a broker-dealer?

They say: I don’t. I know there are some fiduciaries who also sell products, so they get investment commissions as well, but that's not how I do business.

You say: I really appreciate that. I find those RIAs who also are brokers offensive at best. And I assume you don’t take my money directly?

They say: That’s right. I work with many reputable third-party custodians like Charles Schwab, Fidelity, and so on. You may choose whichever one you prefer and you will have access to your money and accounts through them at all times with regular statements going straight to you.

You say: Thank you so much for getting the nitty-gritty out of the way. I would love to continue the conversation in greater detail so I can go over my specific goals and hopes for added value in my investments.

That wasn't so bad, was it?

xo,

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