An advisor must know who he or she is and express it in simple terms

May 13, 2013 — 5:05 PM UTC by Guest Columnist Grant Barger


Brooke’s Note: I think this column is important. We all know that consumers have a heck of a time discerning a good advisor from a bad one. They don’t know where to begin. So Grant Barger is giving consumers a starting place by creating to-the-marrow questions for them to ask as delivered by advisors who are more than happy to answer them.

You can tell whether a man is clever by his answers. You can tell whether a man is wise by his questions – Naguib Mahfouz, Nobel Prize-winning Egyptian novelist

Advisors have been reading articles directed toward investors describing “the right questions to ask your advisor” since the inception of The Wall Street Journal. Questions about fees and certifications as well as performance-based return-on-investment inquisitions are usually in the deluge of published ideas regarding what value the advisor actually brings to the table. These questions often fit perfectly into many sales scripts and pitches, which involve handling objections.

The advisor who wishes to remain relevant will be reading from a different script — one that places him or her in a position of expert client-centric wealth manager. If you are an advisor who desires to be in this position of relevance, these five questions will be helpful in getting you there. A salesman handles objections. A wealth manager sets expectations with distinctive, relevant questions.

1. Why are you in this business?

This is the first question any prospect should ask you as a potential steward of their wealth. In other words: What is your purpose? This question is especially poignant in this era of digital reputation. It is easy for clients and prospects to vet who you are and what you value through the magic of the Internet. Your answer should most certainly be client-focused and purpose-driven. But remember, if your social-media footprint is not in complete alignment with your claims in regard to any of these questions, then your answers are not genuine and your clients and prospects will feel compelled to move on.

The answer to this question in particular requires much thought. When describing why you are in this business, your answer should not be off the cuff or too technical.

Two exercises that will help you formulate your own unique answer to this question are as follows;

Identify three people that helped shape who you are and how you think. What have you learned from these individuals? (Write it down.)

The second exercise is: In 75 words or less, write a letter to your best client detailing why you are grateful or thankful for being allowed in his or her life. These contemplations will help align your thinking in a client-centric fashion and enable you to formulate an answer that is honest, straightforward and truly client-centered.

2. Do you measure your investment success with absolute or relative returns?

Yes, we jumped right in to ROI. It is, after all, the perception of your value from 30,000 feet. Unless you have a benchmarking system in place for client goals, this answer should always be “absolute returns.” The measurement of portfolio progress versus an index is a double-edged sword that holistic client-centered wealth stewards avoid at all costs. It is an easy answer, and a measurement that is more easily tracked by you and your clients. That being stated, this is indeed a business of opinions and your opinion is what matters the most. If you disagree with the previous sentiment, it is in your best interest to be able to explain why relative returns are a better measure of investment success. The competition for your clients is becoming fiercer every day. If you do not have thorough justification for your actions and opinions, the advisor across the street is going to eat your lunch.

3. Can you describe your ideal client?

This answer, like all of your answers, must be genuine. If you say something that is flippant or arrogant, you will lose the prospect — and you should. Having a comparison of serious versus average investors is a great marketing piece to have when this question arises: “I work with serious investors. Here is a list of the characteristics my prospects should have to become my client.” Also, have a check sheet ready of the most significant challenges facing your clients today. This will give you an opportunity to walk your prospect through those challenges facing your ideal clients.

Then ask questions about their specific challenges. The challenges check sheet should have room for specific notes about the prospect and any additional unique challenges he or she might mention. This question presents a fantastic opportunity for the advisor to vet the prospect as well. You can’t be all things to all people. If the prospect is not an ideal client for you, it may be in the best interest of both parties to part ways. See: 10 reasons for advisors to just say no to less-than-ideal clients.

4. What behavior can I expect from you as my financial advisor?

This question allows you to bring up your fiduciary resolve. How you will have the client’s best interest ahead of your own at all times. You should be prepared to show them a marketing piece that clearly demonstrates your unique client experience. How often you will be in contact? Whether you will you call them with bad news as well as good.

This is also a great time to discuss fees. “We will divulge all costs and fees with complete transparency.” If you use an Investment Policy Statement this question is tailor-made for you. Walk them through the IPS and show them how both of you will be held accountable. See: What RIAs must know about hidden, and excessive, fees in serving as fiduciaries to a 401(k) plan.

This question also presents an opportunity to share any marketing materials you may have that describe your investing philosophy and your wealth management model. This is a great time to make visible all of the things you do that are usually invisible to prospects and clients. It is incredibly important to note that you should never promise behavior that you can’t achieve. Client expectations are a dynamic part of the business that must always be managed. This is your chance to set those expectations at a level commensurate with your capabilities.

5. What behavior (responsibilities) do you expect from your clients?

Communication between the advisor and the client is paramount for mutual success. Setting expectations for client behavior up front is a critical step in maintaining your position as a holistic, expert wealth manager. “We expect our clients to invest their time in explaining their situation to us before they invest their money, so that we can have a very clear sense as to the purpose of their wealth.” See: How I advise advisors to run an advisory business from my pulpit.

It is critical for the well-being of all parties that there is full disclosure of all relevant financial information. You can’t make recommendations in a vacuum. “We expect our clients to actively listen, thoughtfully question and candidly respond to our recommendations.” See: What we all feared: 'Better’ disclosure yields worse results, according to Yale professor’s study.

Another favorable behavior you might expect from your clients is staying engaged. Let them know that to you, it’s their money. It’s their future. It’s their life. You may want them to introduce you to their other professional advisors. The collaboration could make a significant difference. In the area of client feedback, it is noble to request that the client be open and honest. It is also critical that the client clarifies his or her expectations. You and your client must be on the same page for realization of goals and dreams to occur.

Having the answers

These five questions have been developed through decades of working with top advisors from across the country. We work with advisors to develop and understand the absolute value that they bring to the table. They also recognize the power of relevant questions. To be able to field these questions with any precision, an advisor must first have an in-depth understanding of all of the inner workings of his or her business. It is my hope that, by reading this article, the advisor of the future will be able to see how relevant questions will play a role in the future of the financial advice industry.

In recognizing the significance of these questions, advisors can prepare themselves with relevant questions of their own to proactively demonstrate their unique value in the form of leave-behind or takeaway marketing materials. When you hand a prospect your list of questions, you can simply say, “These are some questions you should be asking your current or prospective advisors.”

It is not a gimmick or a trick; you honestly feel these are questions that every investor should be asking. And why not? You already have the answers.

Grant Barger enjoys his calling as a second-generation business consultant to financial advisors. He and his father, Steve, help financial professionals accurately define their “added value” in a tangible manner through workshops, webinars and online courses. Grant is a self-proclaimed “reformed” financial advisor from a previous life as a stock broker. His title is president at The Barger Group, but he wears many hats as an administrator, relationship manager, project developer and digital creator. He is passionate about the current transition of the firm’s existing programs into a digital format to educate the next generation of financial professionals. He resides in Birmingham, Ala., with his wife, Shannon, and daughters, Brooklyn and Kylie. He can be reached by e-mail at

Share your thoughts and opinions with the author or other readers.


Pat Mulvey said:

May 13, 2013 — 12:55 PM UTC

This is good. I would quibble a little with points 2 and 4. Regarding the relative vs absolute measurement of success- this depends quite a bit on the type of asset pool and the time frame. To me, the most important consideration is to understand the intention/ objective of the assets and manage expectations. Everyone would love to make money and take no risk (absolute return). But, that just isn’t practical and there is plenty of academic work to back that up. Most notably, correlations among asset classes are unstable and during times of 'crisis’ all asset classes become more correlated. So, when the stuff hits the fan- there aren’t many if any places to hide. I would imagine if someone was clairvoyant and capable of foreseeing market behavior they wouldn’t be managing client assets- rather they would manage their own.

Regarding point 4- we tend to throw around the word fiduciary quite a bit. Fiduciary standards should manifest themselves in actions/ accountability not simply words. To say we 'put our clients interest first’ is empty. What does that mean? It is sort of like saying we have 'smart people’ on staff or we 'work hard’. It seems as though you need to define it, demonstrate it and follow through.


Brooke Southall said:

May 13, 2013 — 10:25 PM UTC

Good thoughts, Pat.


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