The Right Way to “Shop” for a Financial Advisor – Episode 2

Last week, in our discussion titled The Fixed Income Conundrum, we talked about the fact that this quarantine has left many of us with some additional free time and some of us have allocated this extra time to do some financial “spring cleaning.”

In one sense or another, we’ve all slowed down, and we’ve started to look at our lives from a different perspective. When it comes to our finances we’ve begun asking questions like, do I really want to continue to be a DIY investor? Or is my advisor living up to my expectations?

‘Tis the season to be advisor shopping and often the case when we are amidst financial turmoil. Markets shake things up and it challenges our beliefs, routines, and plans.

Now, I’d like to encourage you to first read a piece that I wrote last summer titled, The Right Way to “Shop” for a Financial Advisor where I provided 7 questions I would ask when interviewing a new advisor or even questions you may want to ask your current advisor. Today I am going to add 3 more questions to that list.

First, a Note to my DIYers

One thing in the finance community that annoys me is the belief that investors can’t DIY (do-it-yourself). I have a lot of very intelligent clients and it has not been their inability to manage their own finances that lead them to resource our group. In fact, many of my clients are retirees from the finance industry – stock analysts, certified financial planners, fixed income traders, etc, folks that I would consider to be highly knowledgeable on financial matters.

So why did they make the leap from DIY? I believe there are three key reasonstime, collaboration, and emotions.

Time is a limited resource and as we age, we begin to realize this more and more. I am knee-deep in spreadsheets, research, client projects, all day because it’s my job and what I love to do. Most folks – whether working or retired – would prefer to not fill their limited free time in spreadsheets, research, etc. This doesn’t mean they don’t have the chops to do it, it means they leverage me (their advisor) to do it on their behalf and then they get to go do the other stuff that’s more important to them.

In our culture we have many adages for Collaboration –  Two heads are better than one, many hands make for light work, and so on. One of the most enjoyable parts of my job is brainstorming with clients on ways to improve their financial plan. This could range from lending solutions to tax strategies to adding new investment exposures to countless other solutions. This collaboration runs along a spectrum (based on someone’s preferred level of engagement) and it’s dictated by the client, many DIYers appreciate the opportunity to collaborate and they find these dialogues to be very intellectually stimulating.

Emotions – we all have them. Money happens to be one of those aspects in our lives that is VERY emotionally charged. I like the way Buffett puts it, “The most important quality for an investor is temperament, not intellect.” Like I said, my clients are very intelligent people, but this does not insulate them from all the crazy things markets can cause us to do. An advisor can be a great resource to help us stay the course in times of turmoil.

Questions 8, 9, & 10

Again, you will find questions 1-7 here: The Right Way to “Shop” for a Financial Advisor

8. What do you own?

We’ve all heard the maxim “eat your own cooking,” related to the hope that the cook is willing to eat what he prepares. Nassim Taleb, author of Skin in the Game, translates that same concept this way, “Don’t tell me what you think, tell me what you have in your portfolio.” In a world full of opinions – that is the finance world – it’s important to get down to the brass tacks and just ask your advisor, “What do you own in your portfolio?” This will help you to cut through all the opinions and pitches to get a clear understanding of what your advisor actually believes.

9. What are YOUR retirement plans?

Much of the work that you will do with your advisor will be front-loaded, meaning that at the beginning of the relationship you will map out a lot of your long term financial plans. Some of these goals might be 10 or 20 years out, or maybe even longer. According to J.D. Power, “The average age of financial advisors is about 55, and approximately one-fifth of advisors are 65 or older.” Based on these facts, I’d (1) want to make sure my advisor will be around to execute on the financial plan we put in place or (2) have a clearly spelled out succession plan with someone who will continue to serve my needs.

So, yes, the majority of your conversations with your advisor will be about your retirement plans, but don’t forget to ask about theirs.

10. Can you give me a recent example of how you added value for a client?

In my opinion, there are way too many set-it-and-forget-it financial solutions out there. I don’t believe that you should incur a perpetual cost for a one-time service. To assure that this will not happen, ask your advisor for some real-life examples of how they’ve added value for their clients recently. These examples shouldn’t be hard to come up with and I am sure they will range across a lot of different financial topics – insurance, lending, taxes, investments, estate planning, etc. These examples will provide some great context to how this advisor might be a resource to you in the future.

That’s it…

Ok, now you have a list of 10 solid questions to ask an advisor you are considering resourcing or your current advisor. So, whether you are a DIYer, someone looking for a second opinion, or just doing some diligence on your current relationship I believe these questions will serve you well.

Perhaps you have some other questions you’ve used in the past or that you think would be additive, I’d love to hear them. Send me an email at

And… that’s it…

Until next week… This is TOM signing off…

The Bahnsen Group is registered with HighTower Securities, LLC, member FINRA and SIPC, and with HighTower Advisors, LLC, a registered investment advisor with the SEC. Securities are offered through HighTower Securities, LLC; advisory services are offered through HighTower Advisors, LLC.

This is not an offer to buy or sell securities. No investment process is free of risk, and there is no guarantee that the investment process or the investment opportunities referenced herein will be profitable. Past performance is not indicative of current or future performance and is not a guarantee. The investment opportunities referenced herein may not be suitable for all investors.

All data and information reference herein are from sources believed to be reliable. Any opinions, news, research, analyses, prices, or other information contained in this research is provided as general market commentary, it does not constitute investment advice. The team and HighTower shall not in any way be liable for claims, and make no expressed or implied representations or warranties as to the accuracy or completeness of the data and other information, or for statements or errors contained in or omissions from the obtained data and information referenced herein. The data and information are provided as of the date referenced. Such data and information are subject to change without notice.

This document was created for informational purposes only; the opinions expressed are solely those of the team and do not represent those of HighTower Advisors, LLC, or any of its affiliates.

About the Author

Trevor Cummings

Private Wealth Advisor, Partner

Trevor is a Private Wealth Advisor focused on building customized financial plans for his and many clients of the team.

As the author of TOM [Thoughts On Money], Trevor endeavors to write and speak about financial concepts and principles in a kind of “straight” talk demeanor and posture.

He received his Bachelor’s degree in Organizational Leadership from Biola University and his MBA from California State University, Fullerton.


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