In Search of Good Advice

What does it take to find an adviser who's a match for you? The Anderson family finds out.

By Jeffrey R. Kosnett, Senior Editor

From Kiplinger's Personal Finance magazine, June 2006

9 questions to ask

Financial pros will ask you questions, such as your expectations for returns and tolerance for risk. But because you're doing the hiring, you should also do some interviewing. Greg and Michelle Anderson developed their own list of queries. Some of the best:

1. What process do you follow to identify client goals and evaluate investment performance?

2. What are your sources of research and information?

3. How often will you hold formal reviews with us?

4. Are you available for informal meetings?

5. What's the fee structure?

6. How are you personally compensated?

7. If I have a complaint, where do I take it?

8. Does your firm have a formal dispute-resolution process?

9. Can you show representative portfolios or actual client case studies?

The answers won't tell you everything. References will be self-selected. Even clients' overall portfolio returns are of limited value because of varying time frames. What's helpful is the actual performance of the funds or accounts an adviser proposes for you -- and you should ask for that information. But your ultimate goal is to smoke out bluster and get a sense of whether someone is candid and intelligent. That takes face time.

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