The Right Questions

Successful people ask better questions, and as a result, they get better answers.” – Tony Robbins


Over the course of my career, I’ve visited with many Prospective Customers. We use an established process to identify whether or not the people sitting across from me are a good fit for us and to share enough information about ourselves that those same people can make a good decision about whether or not to hire us. In the course of that process I will ask one simple question; “What questions do you have for me?”.

Unfortunately, most people have no questions for me. Their response is almost always something along the lines of “None. I don’t even know what questions to ask.”.

This is very unfortunate indeed. If you don’t have any questions for me, then how can you determine whether or not I will be the best advisor for you? If you don’t have any questions for me, then you probably don’t have questions for any other advisor you’ve “interviewed”.

If you don’t have any questions for anybody, then how will you screen out those advisors and firms that are a bad fit for you? How will you compare the best candidates and make a good decision about who to hire?

We are talking about your life savings, your lifestyle, your hopes, and your dreams. Why would you ever settle for anything other than the best decision you can possibly make? Why would you ever show up unprepared to thoroughly grill the person you are considering to manage your hopes and your dreams?

Today I want to lay-out a few good questions to ask anybody holding themselves out as a financial advisor; good questions to ask anybody who wants to manage your money and therefore your hopes and your dreams. I’ll state the questions, briefly explain why it’s important, and give you my answer as an example of what a good answer should sound like.


The art and science of asking questions is the source of all knowledge.” – Thomas Berger


  • What is your formal education?
    • Why is this important? Believe it or not, a college degree is not required to become licensed as a financial advisor in the U.S. In fact, many advisors don’t even have a degree and among those that do, the degree is oftentimes in a subject other than business (biology, history, etc …). If your advisor does not have a degree in business, how can he realistically possess a full understanding of the economy, markets, accounting, taxation, and other issues in which he is working?
    • My answer; I have a Bachelor’s degree in Economics from the University of Alaska Fairbanks and have studied economics on scholarship at the Ludwig von Mises Institute at Auburn University and the Political Economy Research Center at Montana State University.


  • What is your professional experience?
    • Why is this important? Research seems to indicate that a full economic and market cycle takes 8-10 years from start to finish. Do you really want to turn your hopes and dreams over to a novice? Do you really want to allow someone to use your life to learn how to do their job?
    • My answer; I’ve been in financial services since 1999, first in commercial banking and then in asset management. I’ve experienced 2 major Bull Markets, 2 major Bear Markets, corrections, recessions, and everything in between. When things get bad, you can trust me to remind you that I’ve been here before and I know what to do.


  • What licenses do you hold?
    • Why is this important? Not all licenses are the same. There are licenses for insurance products (annuities & life insurance), licenses for mutual fund sales people, licenses for stock brokers, licenses for fiduciaries, and many more. If the person you are talking to can only work with mutual funds, how will you ever know whether or not that is the investment vehicle you really need, because he can’t legally discuss anything else with you. If the person you are talking to is a stock broker, how will you ever really know whether he is doing what is best for you or for him, because he can legally put his own self-interests ahead of yours?
    • My answer; My firm is licensed as a Registered Investment Advisor and I am licensed as an Investment Advisor Representative of my firm. As a fee-only business, we are fiduciaries in all that we do for our customers and we can advise on any matter of importance to our customers, assuming it falls within our area of expertise.


  • What are your professional credentials?
    • Why is this important? Licenses do not indicate competence. In fact, regulators are quite fond of placing a disclaimer to that effect on their web-sites and materials. Licenses really only indicate that a person has a rudimentary knowledge of various investment vehicles and is aware of how to legally work within the industry. On the other hand, credentials are supposed to be an indication of extensive professional knowledge, but be careful! Some credentials are little more than marketing gimmicks. A quick search will pull-up several regulatory web-sites listing those credentials that regulator considers legitimate, often with a brief description of the credential. Why would you ever want to hire a professional who cannot or will not obtain credentials testing his knowledge and attesting to that knowledge? I for one refuse to hire physicians that are not Board Certified in their field, accountants without a CPA license, and so forth. If that professional cannot or will not take the tests and commit to the training, then he is not good enough to work on me.
    • My answer; I’m a firm believer that in a knowledge industry, a true professional must test himself to see if he really knows as much as he thinks he knows, so I go through many designation programs to test myself and learn new material. As a result, I hold 10 professional designations. The one I am proudest of, the one I consider the most difficult to obtain and maintain, is the Certified Financial Planner, CFP. I also hold the Chartered Financial Consultant, another somewhat difficult designation to obtain. In addition, I hold 3 designations from the College for Financial Planning and 1 in-house consultant designation. Finally, I hold 4 active designations in the banking industry so that I can better advise my customers on leverage.


  • Are you independent or an employee?
    • Why is this important? Independent advisors are free to do what they believe is best for any given customer. Employees are restricted to what a larger organization wants to do for customers and what those organizations want to do is oftentimes driven by minimal regulatory compliance and a Cost-Benefit Analysis; i.e. let’s do as little as possible to stay out of trouble and only do those activities that benefit us.
    • My answer; Sapiat Asset Management is a completely independent firm. As such, the firm can focus on what is does best, avoid those areas that are outside its area of expertise, and completely focus on doing what is best for its customers. Personally, I am an employee of the firm.


  • Are you independent or captive?
    • Why is this important? Independents can usually do business with whatever companies they choose (There are some formal relationships that must be established first.), so they are free to choose those companies they believe best serve their customers. Captive agents/advisors can only use their company’s products and services, even if they believe there are better options available elsewhere.
    • My answer; Sapiat Asset Management is completely independent. We are totally free to work with only those companies we believe are best for our customers, to fire those companies’ we believe need to be fired, and to establish new relationships as need be. Our only constraint is that we must operate legally and ethically, but we consider that a good thing.


  • What is your process?
    • Why is this important? Without a well-defined and highly refined process, your advisor is just winging it. Your hopes and dreams deserve better than the luck of the draw, you deserve better. A good process helps insure that nothing is missed and everything is accounted for.
    • My answer; We use well defined processes for everything we do, from initial meetings, to plan construction, to ongoing management, to customer service. Each of those processes includes a checklist and identifies which employee is responsible for each step. Without going into too much detail, our process is to meet with Prospective Customers, learn about them, and tell them about ourselves. If we mutually determine that we are a good fit for one another, we will gather some financial data, outline a written financial plan, and then present our findings to you. If we are still on the same page, we will open accounts and implement the plan. Your plan and your portfolio will be actively monitored and managed through scheduled service. Throughout all of this we will keep you informed and answer your questions. You will never wonder what we are doing or be left in the dark.


  • How do you monitor and manage customers on an ongoing basis?
    • Why is this important? Believe it or not, after the sale is made, most advisors will not monitor your plan or portfolio and may never look at it again. Only a fiduciary has a legal responsibility to do so. All others can simply take your check and turn their backs. Given your life constantly changes, the economy constantly changes, and the various markets constantly change, you need an advisor with an established management protocol in place.
    • My answer; Ongoing management revolves around our Customer Service Schedule. We will schedule you for Regular Internal Reviews and quickly check-in with you every time we do an internal review. We’ll also invite you in each year for a face-to-face review. You’ll have several opportunities to learn about where you stand in relation to your goals and to update us on any changes going on in your life. We also want you to call us whenever there is a big change in your life that might necessitate we modify your plan. We don’t need to be the first to know about these things, but we do need to know.


  • How do you make decisions for customers?
    • Why is this important? I’ve talked to more advisers than I can remember. Something that has always struck me as odd, even dangerous, is that many don’t have a formal decision making process. They are tossed to and fro with every political wind or financial fad. Important decisions are made based on a guess. Need I say more?
    • My answer; All decisions are made based on well researched facts and mathematical calculations as each relates to your personal goals. We don’t guess or assume anything. Our customers don’t deserve anything less than objectivity and discipline from our firm. For example, we have a written Buy-Hold-Sell discipline we will use on your portfolio. When applied to specific investments, it tells us exactly what you’d expect, whether to Buy-Hold, or Sell a given investment.


  • What is your ongoing service schedule?
    • Why is this important? Without a written Customer Service Schedule, how do you know you’ll be taken care of? A good schedule tells advisors and staff what to do, when to do it, and how to do it so that nobody is lost in a sea of customers. Without a schedule, you may become the dreaded “faceless account number”.
    • My answer; In my experience, the complexity of a person’s affairs is directly related to the size of their wealth. The greater the wealth, the greater the complexity. The greater the complexity, the greater the time required to successfully manage those affairs. Because of that, we have a tiered Customer Service Schedule based on Assets Under Management. The more money you hire us to manage, the more time we schedule to manage your affairs. The less money, the less time. Everything is scheduled around the primary account holder’s birthdate. Based on what you’ve told me, we would be calling or emailing you every <month, quarter, semi-annually, etc …>. But even our smallest relationships are scheduled on our calendars and every customer is welcome to call us anytime they have a need. Just because you aren’t scheduled for something doesn’t mean we won’t work on a one-off project when you need our help.


  • How do you do Continuing Education?
    • Why is this important? If you were going to study international diplomacy, would you rather take a correspondence course, hear from a low level local State Department employee, or learn from the Secretary of State himself? Obviously the Secretary of State knows more, has more experience, can provide more insight, and can answer even the toughest questions. Don’t you want a financial advisor that is seeking out the best training available and bringing it back home to you?
    • My answer; My preference is live training at national and international conferences. I want to learn from industry thought leaders, top regulators, and the best of the best, and that is only available at a large conference. Even then, I always read the agenda ahead of time to make sure I can take classes in my area of expertise. It doesn’t do me any good to take a class in something I never do and probably never will do. If I am running out of time, I might take 1 or 2 classes online and as a last resort, I’ll take a correspondence course if I have no other option, but that’s rare.


  • What is your specialty?
    • Why is this important? I discussed this in my very first blog, but to briefly rehash; Jack of All Trades And Master Of None. I think you deserve an experienced specialist to manage your hopes and dreams. I hope you agree.
    • My answer; We only work with Individuals, Families, and their Trusts & Business’. We do not work with Foundations, Endowments, or other institutions. We do not respond to RFP’s. Our specialty is intergenerational family relationships. We work only with those families. We will also work with trusts which benefit those families and the businesses they own. We only have one exception and that is a company we have worked with for years and several of our customers sit on the decision making committee of that company.


  • What is your favorite area of practice?
    • Why is this important? I expect to receive better advice and service when my needs match-up with my professional’s interests. If they don’t, I may not receive bad advice or bad service, but I’m probably not receiving the best I could otherwise get.
    • My answer; I enjoy a lot of areas of practice, but my absolute favorite is estate planning, especially intergenerational estate planning. I love to roll up my sleeves and dig into Wills, Trusts, and all the complexities of a good estate plan. With that said, I’ve been at this so long that I am rarely intellectually challenged anymore. Anything that is new to me, difficult, or complex will peak my interest and get my full attention just because it’s an opportunity to test my skills.


  • What is your least favorite area of practice?
    • Why is this important? I expect that if my needs are something my professionals hate to do, I am not going to receive high quality, timely service, and the best advice possible. Why? Because they hate to do it! Shouldn’t you know if your needs are what your advisor hates to do?
    • My answer; Institutional work. Institutions come with a lot of liability, will wear me out, and provide a ridiculously small margin. I detest institutional work.


  • What is your philosophy for financial planning and money management?
    • Why is this important? Why would you ever hire a professional who has not developed a concrete approach to personal finance? Doing so almost assures that you will be greatly disappointed with whatever you receive.
    • My answer; I believe financial planning is an open and honest process between customers and myself. They need to talk and I need to listen. Everyone needs current financial statements, to have their insurance policies evaluated, to plan for retirement, and to plan for their demise. There may be some other common items to consider, such as funding a child’s education or a stock option exercise plan. Money management should then be focused around that plan and successfully achieving whatever it is that person wants. It should be product and style agnostic, meaning it should be managed in such a way that a customer can get what he wants. Of course, the customer must understand the risks and that there are no guarantees of success. For his part, the advisor must keep himself educated at all times, aware of current events, and must be willing to break bad news to a customer when necessary. If a customer has unrealistic expectations, the advisor must be willing to explain that and provide viable options. As I said, a completely open and honest relationship of mutual trust and respect.


  • Are there things you will not do?
    • Why is this important? If there are things that your advisor will not do, shouldn’t you know what those things are? What happens when you need one of those things and he refuses to do it for you?
    • My answer; There are some things that you aren’t likely to bring to me, such as institutional work. We’ll address those items if you ever bring them to me. I’ll let you know and refer you to a talented professional who does enjoy that type of work. On a day to day basis that will probably affect you, we don’t speculate. In my opinion, there are some strategies and some investment vehicles that carry to much risk for retail investors, so we just don’t go down that road. For instance, in my opinion retail investors have no business being directly involved in commodities. You will never hear me say that you should be and you will never get me to agree that you should be.


  • Do you have a preferred investment vehicle?
    • Why is this important? If your advisor has a favorite investment vehicle (annuity, mutual fund, stock, etc …) you’d better find out, because he will probably place you in such an investment.
    • My answer; I tend to use cash and individual stocks and bonds because in my opinion I can better control risks and tax consequences, but I do supplement with ETF’s and CEF’s where and when needed.


  • What happens when you and I have a disagreement about how to proceed?
    • Why is this important? Unless you hire a “Yes Man”, you will eventually have a disagreement with your advisor. It is smart to find out now what will happen when that occurs. I know many advisors who will simply terminate a relationship if a customer refuses their advice.
    • My answer; When it happens, not if, but when; we will talk it out. We will run a hypothetical change in your financial plan to see what happens. If you still insist, you’re a big <boy or girl> and it’s your money and your life. I may do it for you, but ask you to sign a release of liability first. If I do, you should stop and think long and hard, because that piece of paper is basically saying that I firmly believe this is going to blow up in your face and I don’t want to be held responsible for it when it happens. If I think your idea will completely destroy your plan and finances, I will refuse to do it and you will have to go elsewhere if you insist. If you always ignore my advice, then I may politely ask you to go elsewhere. There’s no point in hiring me if you’re not going to listen to me. Rarely, a customer asks me to do something illegal or unethical. The customer doesn’t know it, so I’ll explain and matter of factly refuse to do it. Of course in reality, we are almost always able to talk it out and find a mutually agreeable solution.


  • Do you have paid referral relationships with other professionals?
    • Why is this important? If your advisor recommends a specific accountant, attorney, bank, etc … don’t you want to know if it is because he believes that is the best professional for you or because he’s being paid to make that recommendation? Maybe those professionals would offer you a discount if you consolidate your business among that group? There are many reasons to know the answer to this question.
    • My answer; Not at this time in this community. I am not opposed to establishing such a relationship, but the other professionals have to meet our standards in all ways. If that ever happens, I will tell you up-front when making that referral.


  • What are your minimums?
    • Why is this important? Are you looking for someone who takes all comers or someone with standards? If they do have standards, can you meet them?
    • My answer; We require a minimum of $25,000 available to invest. Anything less may not be economic for our customer and we are in the business of doing what is best for our customers, even if we have to tell them that we can’t help them. There are a few exceptions, such as employees participating in a business retirement plan sponsored by one of our customers. Occasionally we run across someone who shows such promise that we make an exception for them, but that is rare. And of course, as an intergenerational specialist, we do have small accounts for the heirs of larger customers.


  • Who is your Ideal Customer?
    • Why is the this important? If you do not meet the advisors desired profile, why would he ever take you on as a customer and why would you ever do business with him?
    • My answer; We prefer customers who trust us and will be open and honest with us; customers who value experience and expertise and will follow our advice. What we don’t want are customers who try to tell us how to do our job or refuse to do anything we recommend. If you already know how to do what we do, you shouldn’t be here paying us. If you aren’t going to listen to our advice, you shouldn’t be here paying us. We don’t want customers who hold back. Our reputation is our most valuable asset and we don’t want it ruined because someone didn’t give us a complete picture.


  • What are your fees and expenses and what do I get for that?
    1. Why is this important? You cannot determine the value of what you are receiving unless you know what you are receiving and how much you paid for it.
    2. My answer; We charge on a tiered percent of assets under management. The more you place with us, the less you pay. I can’t tell you exactly where you’d fall in our schedule until I know the details of what we’re considering, but as soon as I know I’ll tell you. Our fees are “all-in”. They cover financial planning, including estate planning, trades, statements, and most anything you could think of. I don’t believe in nickel & diming customers to death. If you have a special request, such as an overnight document, we will charge you what our vendor charges us and not one penny more. We’ll always let you know up-front if you are requesting some kind of special service. Our planning covers most everything a retail consumer needs, but if you come to us with a one-off project, we’ll let you know and give you an estimate for hourly work or a set fee. We’ll never surprise you with a bill you weren’t expecting.



It is better to know some of the questions than all of the answers.” – James Thurber


There is a lot you should know about your existing financial advisor and about any financial advisor you are considering hiring. These are just 22 basic questions to ask. The internet is full of questions to ask financial advisors. A quick search will pull up many. Just be sure that whatever you ask actually pertains to you.

These are your hopes. These are your dreams. This is your legacy. You owe it to yourself, to your hopes, and to your dreams to ask questions in a reasonable effort to make sure you hire the best person for the job.


Sapiat Asset Management is an independent registered investment advisor, specializing in financial planning based, asset management for Gen X Individuals & Families and their Trusts & Businesses.

No Comments

Post A Comment