Forethought Planning Podcast

Ep 76: How to prepare for Your First meeting with Your Financial Advisor

January 11, 2022 Shannon Foreman Season 1 Episode 76
Forethought Planning Podcast
Ep 76: How to prepare for Your First meeting with Your Financial Advisor
Show Notes Transcript

How should you prep for before you have that first meeting with your financial advisor?

 And I don't mean preparing statements or things of that sort.

I'm talking about the interview process.

What are the things that you should be asking that person?

I have a little strategy that you can do for yourself to make the process easy.

Something most financial advisors are probably not going to talk to you about, but we are pulling back the curtain as we work towards your financial goals in 2022.

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Securities offered through LPL Financial, a member of FINRA/SIPC. Advisory services offered through Advisors' Pride, a SEC registered investment advisor. LPL Financial, Advisors' Pride, Forethought Planning and the guests of Thrive For[e]ward podcast are separate and unaffiliated parties. Lisa Harris and Lisa Harris & Co are not affiliated with Forethought Planning, Advisor's Pride, or LPL Financial. The views expressed here are those of the participants, and not those of Forethought Planning, Advisor's Pride, or LPL financial. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. LPL Financial and Forethought Planning do not offer legal services.   

Shannon Foreman  0:00  
Hello, friends, welcome to the Thrive Forward podcast, we are so grateful for you joining our airways today. That means that we've got some great content for you as we start to think about in maybe a non traditional fashion. What should you prep for before you have that first meeting with your financial advisor? And I don't mean, talking about statements or things of that sort, while you're in the interview process, trying to find the right partner? What are the things that you should look for before? And then what are the questions you should ask that person in the actual conversation plus a little tidbit that you can do for yourself to make yourself really ready to go in that conversation? Something most financial advisors are probably not going to talk to you about are the things that we are pulling back the curtains on today, as we begin this episode, and help you work towards your financial goals in 2022. If you know somebody that's working towards those goals, what we would love if you shared this episode of The Thrive Forward podcast with them. Now, let's go on to the good stuff.

Shannon Foreman  1:19  
Alright, so let's talk about maybe a little bit of the prep work that you should do before you meet with a new financial advisor? And what are the questions that you should ask them. But I want you to arrive at that new conversation with this new person that might be a part of your personal board of directors in a way where you feel really confident. Some of these spaces when you're meeting with professionals you might not be used to or don't feel comfortable with because maybe they don't relate to you. Do your homework first, understand who those people are that you're envisioning, working with and partnering with? Have you checked out their website? Have you checked out their professional LinkedIn or other social media resources? What are the things that they're posting about, or offering information around, or they things that are important to you and things that you want to be able to do? That's the first thing do your research about the people that you're investing in? But now I want to flip the script a little bit more towards you. Because oftentimes, we want to focus on the advisor. And yes, I will give you the topics that you should discuss with them and the questions you should ask. But you, as the investor should be doing some homework for yourself first to what is it that you want that partnership to look like? What are the things that are not negotiable for you? How do you want that person to communicate with you? What are the things that are important? Is education, something that's important to you? Do you want to be active in the investment decisions? What are the goals that you have that you want to achieve? And I know that that's kind of a big, broad brushstroke, when we say what are the goals that you want to be able to achieve? And every financial advisor, we're all kind of guilty of asking those questions when in reality, sometimes us as an investor, you're like, I don't really know what my goals are that I want to be able to achieve. The reality is you do just have to dig a little bit deeper. What is that story that you've had with money, from childhood to early adult to adulthood look like? Have you been told different things about money that are impacting you on your journey going forward? Is it a goal of yours to rub your two net last nickels together? Do you want to be able to leave an estate to the people who are after you, whether that be a nonprofit or family members next generation? Do you want to understand the complexities of your employee compensation plan better, but you don't understand them and maybe are a little too afraid to ask. So you want somebody that's going to be knowledgeable in those areas, who also leads with a comeback compassionate heart, and the ability to be able to explain things and be patient with you so that you can understand them and feel more empowered, as you move forward in this journey? What is that partnership look like? What do you want from it? And what do you need from it? What is that educational piece? So before you even meet with those individuals, one, do your research to understand what part do you want them to play?

Shannon Foreman  4:37  
And what part do you want to play and that you could be plural, right? That you could be yourself as an individual, you and your partner. If you're talking about a partner being in the situation, then you also need to probably define a little bit of what those roles are. Who is responsible for what in where and how. And who's going to be a the majority of communicators, when you communicate with this new individuals have important that communication goes to both individuals or there will be one person that's kind of taking the lead, my encouragement to you is it always goes to both of you. Because if something were to happen, you're all on the same page. So now you're getting ready for that meaning you've done these things, you've answered these questions of yourself, you've began to kind of pull that first layer of the onion back, but you really need somebody else there to kind of help guide you in the further process. You need to understand that you have control in this conversation and the ability to ask quite literally any question that you want to, you're interviewing them to handle, quite literally some of the most important things in your life, your health, your wealth, and your relationships are the biggest parts of your life. And I'm not putting those in any particular order. They're all different for each one of us. But the reality is our wealth and our money touches every aspect of our lives. We should want somebody that understands that in those conversations as we move forward. So you have the power to ask any question, as you walk into this conversation, you need to feel confident as you go into that room and strike a power pose. If you don't know what that means. Like for me, sometimes it's like that Superwoman pose that I put my hands on my hips before I go to a speaking engagement, or an interview or something like that, that I just need to gain a little bit of extra confidence. And if you're watching the video, you can see me standing in my power pose right now. But that is something that just gives you that little edge of being able to know that you have the power to be able to ask those questions. I say that because I know how nerve wracking meeting somebody new can be, but also meeting somebody that you're going to partner with on a professional level. And maybe you feel like, they're smarter than you. The reality is, we use a lot more accurate ends, and we do a lot of things. But nobody is smarter than anybody in these situations. You arrive at this space with your knowledge and expertise. And us as professionals arrive with our expertise, and our education and our ability to look at situations further for you. That's it, we're just a resource. It's kind of like we're a tool in your toolbox. That being said, the tools in your toolbox need to function for you. And you need to understand how they work for you. And what do they cost? And what are the things look like? What do you get for that cost? But most important thing that I think you need to understand is how does that advisor work? What are their fees, fees can come in so many complex areas in our, in our universe of the financial industry is sometimes what I want to refer to it as, but our universe can charge you upfront fees and commission fees and advisory fees and back end fees. And sometimes they don't make any sense. And so are you going to get somebody that's going to be able to accurately articulate that, let me break those down for you just a little bit high level commissioned advisor is going to receive a commission for products that they sell to you, a advisory advisor or somebody that charges a percentage of assets under management actually has to run with you. And your best interest in a fiduciary capacity, which is the fancy word, we mean for showing your best interest as we make financial decisions, kind of pay as you go in that model. So if down the road, you decide you don't like working with that person, you can leave and you've only paid what you've paid thus far. Whereas if you work in a commission basis, you might give a good chunk of money away on the front side, and not really have that ongoing pain relationship. So it kind of depends on what you want to do, the size of the relationship, that you have the functionality, again of how you want that person to be active or not in your financial planning relationship. I'd also make sure that that individual has financial planning as something that they want to focus on. Financial planning is the key to everything investment management is actually just a part of the pie. Of course, it's a big part of the pie that we do. But our roles have really kind of

Shannon Foreman  9:44  
evolved is what I want to say since maybe a couple of decades ago, where we might have been known as the stock pickers. Well, the reality is a lot of us aren't the stock pickers anymore. We're more of the planners and the big picture drawers that then make everything a little bit more clear as you narrow that funnel down to figure out exactly what it is that you need to do and execute on to make your financial goals, more of a reality. So understand how that person gets compensated if they're not able to tell you how they're compensated and what their fee structure is probably not the right person to work with. But again, understanding are they collecting the commission? Or are they paying for things under the advice standpoint, some advisors also and financial planners will work on an hourly basis and charge you a fee for that a financial planning fee or charge you an annual financial planning fee, understand how many meetings you're going to get? What does that explanation look like? How many hours do things take to process so that you again, feel more financially empowered as you move forward. For instance, at forethought, planning, we function in both of those capacities, we have the ability for clients to pay for us to do a financial plan for them, as well as an advisory contract. We work minimally on a commission basis, and it's usually only anything to do with our insurance business. So all of our investment management have the tendency to be in an advisory platform, again functioning in a fiduciary capacity for you fiduciary meaning, again, working in your best interest, then understand, as I sometimes refer to it, the alphabet soup after an advisors name. Look, every industry has lots of designations that you can receive, but what do they really mean to you? And how does that advisor actually implement the use of those letters after their name, just because they have them doesn't mean that they actually use them in practice, not trying to throw anybody under the bus. But I have had individuals with certain designations, whose financial plans and quotations have ended up on my desk, and they aren't financial plans. And nothing those clients talked about were implemented, and they have no idea what they were charged or how things worked. That doesn't really sound like a fiduciary type of relationship. So again, looking at it for what's in your best interest, not the advisors best interest. Sometimes when we work with commission based products, how do we really know that an advisor is working in our best interest without understanding them again, one thing that people often ask for of advisors, which actually we aren't really able to get is referrals, like referrals of people we've worked with, or recommendations, a lot of times you can go on for other professional services and see, you know, a five star rating or a Google review or different things like that. Reality is everybody's financial relationship is different. And so what might work for Mary isn't necessarily going to work for you. We need to understand your picture and make advice and recommendations based on your life. So just because Mary loves us doesn't mean you will. Now hopefully you do. But that's not something that most financial advisors will be able to do. On the flip side, it also means that you can't really understand if an advisor is doing what they say they are doing. There aren't really any negative reviews. However, you can go to broker It's a FINRA managed website, which is one of our governing bodies for financial advisors, and look up to see if there have been any registered complaints. Those can happen. And you can look up that advisor again, like I mentioned googling that person before you meet with them. You can look them up and be able to ask them questions about what are those things on their record? What are those things mean? How have they changed as a person? What are the bells and whistles that they've upgraded to make sure that things don't get fallen through the cracks? I think we can ask those questions, especially when we are going to be handing over lots of moolah to somebody to manage.

Shannon Foreman  14:33  
That being said, let's talk a little bit about some of the other things that you should consider. So I talked about this in our last episode of the Triforce podcast but money touches every aspect of our lives. And one thing that we pride ourselves on it forethought is being able to make connections for you. How will this individual partner with existing relationships like your attorneys, or CPAs, or provide recommendations other professionals that you could be able to tune into? How are they connected to be able to help you create those connections? Of course, you're already crazy busy with so many responsibilities that you have. Sometimes you just want to go to one place and ask them, how are they going to help you do that? So, as you're in these sessions, understand, and ask the questions on how do they get compensated? What do they what do they pay you? What is the return? Or what do you pay them? Now what they pay you? But yes, you want them to make you money. Doesn't always happen that way. Of course, we can't guarantee anything in our world. And when you step into the investment arena, it is a risk that you have to be willing to take. So you need to understand what risks are you willing to take. But that being said, you need to understand too, how is that person going to educate you, and help you move in the direction that you want to be able to move? It isn't just all about that person. But one thing that I had a client tell me a while back was Shannon, one thing that I appreciate about you is not only how you empower and educate, but also how vulnerable you are, I think it's okay for us to admit if we made a mistake or need to adjust something because we are human. And if we miss an email, or we miss a phone call, how do we show up in a vulnerable space to say, You know what, I'm really sorry, something that we did XYZ is me, I want to make sure that we make that right for you, or I'm sorry that I missed your phone call and didn't get back to you right away. Again, we're all human things happen. But making sure that we're vulnerable, not only in the spaces that where we might mess up, but also sharing a bit of ourselves too. And creating that relationship with our clients. Beyond just the investment side of things. I feel just honored that some of my clients have become friends, not just clients because we get to walk through so many journeys together. So as you enter into this meeting, you've done your homework, you understand who they are, you understand what you need for them, you've done some Googling, you understand maybe the things that have happened, if any, to this advisors record, and you are empowered, and you struck that power pose and you're walking into that meeting, ready to ask them, How do you make money? How do you work? What does that relationship look like? What is the time commitment that I'm looking for? What are you going to accomplish? What are my responsibilities? What connections can you make for me? And how are we going to be working in partnership together? Those are the things that I think you need to ask and really think about that before you go into it. If of course you have any other questions, I mentioned this in our first episode of the podcast this year, but we have a new series called money on your mind. So feel free to submit any questions from this episode or any episodes of the Thrive Forward podcast on our website, forethought? You can go to the Resources tab and money on your mind and submit your question there. And we will answer it on our weekly money on your mind spots that air on our social media challenge channels and on our website. So I hope that you found this episode empowering as you continue to achieve those things on your checklist for 2022 going forward. Again, don't hold off if you listen to this episode, and we're like, well, Shannon, I actually don't have a meeting with a financial advisor scheduled but I know I need to. Hello, this is your time, my dear friend, when this episode is over, you start the process. You can schedule your wealth assessment with us and include us in the advisors that you are interviewing at forethought backslash wealth assessment, but don't wait. I want you to schedule that appointment today. You can't wait six months down the road and think that you will be able to make up for those six months every single time. What happens if life changes in six months?

Shannon Foreman  19:30  
Don't you wish you would have taken that initiative today? Because as I say, always at the end of our podcast, you are worthy of wealth.

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