Background Check Potential Advisors
Before your first sit-down, you want to arm yourself with information about those incidents. You can do this either when you are first sorting out advisors -- doing the work on your short list of candidates before the initial interviews -- or immediately after your phone conversation, when you have decided to set up an interview.
If the advisor is sending you any paperwork to prepare you for the meeting, ask for any regulatory or background information, such as a Form ADV for financial planners.
You want the background data in hand before your initial interview so you can ask about any black marks or red flags and get an explanation of what happened and how problems were resolved.
If the advisor balks at owning up to the past, or the answers sound hollow, you won't be hiring him or her. Far better to confront the person with what you know in the first meeting than having to call back or arrange for a second meeting before you hire them.
If an advisor's disciplinary or regulatory history comes back with enough black marks to scare you, cancel the initial interview immediately.
By Chuck Jaffe