Meeting with a prospective fiduciary financial advisor is kind of like a first day, and I think we all remember what those are like! They can be fun, they can be awkward (especially when a massive peppercorn snuggles into your front teeth), they can be a tap dance of conversation—each person talking, listening, laughing, and feeling out whether it’s worth a second date.
That can be the way a lot of professional relationships start (minus the fettuccine alfredo). There are conversations, there are questions, there are tangos where both parties try to figure out if the fit is right.
That’s no different when it comes to finding a fiduciary advisor. You will have initial meetings and conversations to discuss services offered, goals, fee structures, and more. That’s all to say there’s not a “one and only way” to do things. The important thing is you must figure out what is right for you.
Here’s what to expect from those initial conversations. That plural form of the word conversation is vital here; you don’t have to expect to make a decision after one talk. This isn’t a sales pitch for a timeshare in Aruba. This is really a courtship in which we try to figure out whether we’ll make that Ideal Partnership. Some guideposts:
Ask a lot of questions. Remember, you’re there to gather as much information as you can. Ask about their services, their professional network, their accessibility, success stories, common mistakes people make, and issues important to you. You’ll get a sense of their history and how they work, which will help you see if they are a good fit.
Expect to answer a lot. Good fiduciaries won’t be selling themselves to you. They’ll be asking you about you. They’ll want to know your goals, your dreams, your pain points, and much more. Fiduciaries work best as your advocate when they know what makes you tick, what problems you’ve had, and where you want to go.
Ultimately, we have to know what’s important to you and what hurdles you face. To that end you can expect a perceptive fiduciary financial advisor to ask you all sorts of questions—some of which may feel like they have nothing at all to do with a 401K, IRA, or mutual fund. Some of the questions we ask in the initial meetings:
- What are your personal and professional goals?
- What’s important about money to you?
- What does a successful life look like when you’re 45, 55, 65, 75, 85?
- What is your vision to create wealth for your family?
- What are your quality-of-life desires?
- How do you save and invest?
- How do you earn your money?
- What were your best and worst experiences with a profession-al adviser?
- If you didn’t have to work anymore, what would you do?
- What relationships are most important to you?
- How does your family fit into your future financial goals?
You can see why this takes more than just one simple conversation. In fact, in this initial stage, our discovery meetings usually span the course of multiple meetings. This is about relationship building. The more we know about your interests and goals, the better we can serve you and be your advocate.
Discuss fee structure. For a fiduciary firm this discussion should be open book and transparent. With a fiduciary firm you won’t see any fees charged on stock, bonds, or products, as we’ve discussed. But you can price shop and compare costs to services received. The important point is, are you getting the services you want and deserve for the fee you’re paying?
Here we have several cost structures—one based on assets under management, one an annual consulting fee/retainer, or an hourly rate. We discuss all the options and the scope of engagement—the advantages and disadvantages to each.
You should walk through the fee structures with every fiduciary advisor you talk to and base your decision not only on the fee, but also on the services you get for those fees. In the end it’s really not about the fee; it’s about the services we can provide you in creating and protecting your wealth, giving you back your time, reducing your stress, and supporting you in solving your life problems—the services that have massive value and really don’t have price tags.
Know what you’re getting into before you commit. While these early meetings can be a feeling-out process, you should have at least made an important step in your own mind: Are you ready to commit to working with a team?
I remember one prospect—a married couple who were doctors living in Pennsylvania and owned their medical practice in New Jersey. They had about $10 million in publicly traded assets held at a large, well known mutual fund company and were do-it-your-self investors. They were referred to us because they wanted guidance on how to manage their assets upon selling their practice, so we had a meeting with them before they sold their practice in 2019. Later they determined they were comfortable continuing to manage their finances on their own and merely needed to evaluate the sale of their practice.
Oftentimes it can be a struggle for do it yourself (DIY) investors to evaluate the value of a fiduciary financial advisor. It’s not all just about selecting investments and creating asset allocations. It’s the cash flow planning, tax planning, estate planning, outside professional network guidance and connections, and life coaching that a fiduciary can bring to your table. So it’s helpful to know which services you really need if you are a DIY investor.
Remember, trust is earned. Nobody expects you to divulge everything in a first meeting with someone. You should think about initial meetings as setting up a foundation for the first year. What are your top three priorities? What are your goals? What do you want to accomplish in the near and longer term?
Ultimately you have to think of these early meetings as a time for us to get to know each other. It can be difficult to disclose personal details that we’re so used to keeping private, but the end goal is one that we all value and all share: we want what’s best for you.