What Happens During Your First Meeting with a Financial Advisor

Image Credit | Kay Abrahams | Adobe Stock

Here’s a situation that you may find yourself in at some point in your life. You’re on your way to meet with a financial advisor for the first time. You’re excited and a little anxious. You’re excited because your financial questions about taxes, retirement, and investing are finally going to be heard by a professional. You’re anxious because you have no idea how this meeting is going to go. If you’ve never met with a financial advisor before, you’re walking into something brand new to you. Even if you have worked with an advisor in the past, this is sure to be a new experience.

Seasoned financial advisors have a process when meeting with a prospective client for the first time. It’s true that every individual’s situation is unique and should be approached with curiosity – but the advisor’s process of getting to know you should be smooth and repeatable.

Today, I’ll share:

• What happens during a typical first meeting with a financial advisor

• Red flags and green flags to watch out for

• Important questions to ask during the interview process

The Goal of the First Meeting

Before the meeting starts, think about what you want to accomplish. Some people want to hear about the advisor’s background and credentials. Some expect to hear about a product that will meet their financial needs. I think these are helpful, but it doesn’t guarantee an impactful first meeting.

Your financial advisor will sit at the table among your most trusted professionals. Your advice team, usually comprised of your financial advisor, CPA, and estate attorney, is who you turn to when facing challenges and opportunities that require professional assistance. It’s critical that you fill these seats with people you like and whose advice you trust implicitly.

That’s why I believe the most important outcome of your first meeting is building rapport. You will start the process of creating a foundation of trust, mutual respect, and understanding. It takes time to build trust with another person, that’s why your advisor should have a process.

The Financial Planning Process

Financial planning with a professional follows a process that can lead to better rapport with your advisor. The CFP Board of Standards, which oversees the requirements for the Certified Financial Planner® certification, developed a 7-step system for providing financial planning guidance commonly followed by CFP® professionals.

The steps are as follows:

Step 1	Understanding the Client’s Personal and Financial Circumstances
Step 2	Identifying and Selecting Goals
Step 3	Analyzing the Client’s Current Course of Action and Potential Alternative Course(s) of Action
Step 4	Developing the Financial Planning Recommendation(s)
Step 5	Presenting the Financial Planning Recommendation(s)
Step 6	Implementing the Financial Planning Recommendation(s)
Step 7	Monitoring Progress and Updating

Typically, the steps will be broken up into multiple meetings. Steps 1 and 2 are commonly addressed in your First Meeting. This is one of the early ways to know if you’re working with a professional. Do they lead with relevant questions and genuine curiosity? Are they spending the time to fully understand your current situation before prescribing solutions? Notice that presenting financial planning recommendations doesn’t occur in this sequence until Step 5.

In the beginning, your prospective advisor should be focused on asking the right questions and listening. Only by spending time on this step can they ever truly have the information they need to give you personalized financial advice.

Red flag: The prospective advisor spends the majority of the meeting talking about themselves.

Red flag: The prospective advisor immediately starts talking about products or makes recommendations without knowing your situation.

Green flag: The advisor asks meaningful questions to better understand your situation before making recommendations and displays good listening abilities.

Green flag: The advisor can clearly explain their process when meeting with potential new clients. The process should not feel rushed and not pressure you into making a quick decision.

What to Bring When You Meet with an Advisor

Image Credit | Armmy Picca | Adobe Stock

In order for the advisor to fully understand your financial situation, they should be asking for a copy of certain financial documents. This usually includes the following:

• Most recent federal tax return

• Pay stubs / W-2s

• Investment and retirement account statements (IRA/401k)

• Bank statements

• Debt details (mortgage, loans)

• Insurance policy details

• Estate planning details

  
  

The documents provide the numbers and can fill in any gaps from your conversation. Having the documents available allow the advisor to analyze your plan and make recommendations.

At Andrews Advisory Associates, LLC, one thing we notice and often highlight for prospective clients is the difference between what they thought was happening and reality. This is especially true in our tax planning work, where deduction amounts and tax laws can change over time. By having the documents in front of us, we can outline for our clients exactly what is happening and how they should adjust their planning.

Red flag: The advisor makes recommendations without seeing your financial documents first.

Green flag: The advisor encourages you to bring your spouse or trusted loved ones with you to the meeting.

Questions to Ask a Financial Advisor

Although a portion of the first meeting will be spent answering the advisor’s questions so they can better understand your situation, there should be enough time for you to ask the advisor questions of your own.

This is an opportunity to see if you’re compatible on key items, such as frequency of meetings, fee structure, and the scope of their work.

The Securities and Exchange Commission introduced Form CRS (Client Relationship Summary) that all SEC-registered advisory firms must file. Designed to protect investors, firms must answer the questions on the Form which is available for the public to view.

1. Are your recommendations truly in my best interest?

2. Will your recommendations be primarily focused in one area, or comprehensive in nature?

3. Do you have the knowledge and experience necessary to successfully navigate the complicated financial planning and tax world to achieve my financial goals?

4. How many clients do you serve and how does their situation compare to mine?

5. How often will we meet?

6. What will be my total investment expense, how much will you be compensated and where can I see this in writing?

7. Will you help me solve any and all financial problems I may encounter?

8. Where do you keep my money and how can I see it?

If you’re reading this and are not a client of Andrews Advisory Associates, LLC, you can check out our answers to these questions here.

Red flag: The advisor is unable to plainly answer your questions about their fees and services.

Green flag: The advisor has an answer for each of your questions about their process or can provide the information in a reasonable amount of time.

In Summary

Before meeting with a financial advisor for the first time, have a game plan in mind.

• In my view, the primary goal of the first meeting is to see if you can build rapport with the advisor.

  • Do you trust them and can you see yourself working together on critical financial decisions?

• Bring your financial documents to give your advisor the full picture.

• Bring your spouse or trusted loved ones with you to help with your decision.

• Have a list of questions ready to ask the advisor and get a clear picture of what it would be like to work with them.

That’s it. To find out how we do first meetings with potential clients, let’s chat.

Travis

Investment advisory services offered through Andrews Advisory Associates LLC, a registered investment advisor.  This blog is not meant to give investment advice. Before investing in any advisory product please carefully read any disclosure documents, including without limitation, the firm’s Form ADVs. The information herein is provided for informational purposes only, and does not constitute an offer, solicitation or recommendation to sell or an offer to buy securities, investment products or investment advisory services. Nothing contained herein constitutes financial, legal, tax, or other advice. These opinions may not fit your financial status, risk and return profile or preferences. Investment recommendations may change, and readers are urged to check with their investment adviser before making any investment decisions.