How to Get the Most Information Out of Financial Advisor References

When you ask for references, don't expect to be given the names of the last five clients who walked through the door -- a measure that might provide some objectivity -- but rather the names of good customers or volunteer praise-singers.

Assume you are about to talk with people who are in the advisor's corner.

Some advisors include that assumption in their reasons for not offering references. They argue that a prospective client won't gain much insight from what amounts to an endorsement, while the existing client loses both confidentiality and time.

If you check references by asking the typical questions, the advisor would be right, there would not be any blood in this stone, this rock-solid reference.

There are ways to extract a pint or two of blood -- information -- if you know how.
Start with the premise that every counselor will tell you during an initial interview precisely how he expects to work with you, but only another client can give you an idea of how the process feels from the other end. The advisor is giving you the picture from his side of the desk; you need to walk the proverbial mile in the shoes of another customer to see how they'd fit you. (This is also why you want clients, and not professionals, as references; another advisor has worked side-by-side with the pro you are interviewing, she hasn't been on your side of the desk.)

Finally, assure the advisor that you intend to call references only as a final check, as the last piece in your decision-making process, so that you will not bother anyone with questions until you are close to making your selection. What's more, point out that you do not expect answers to personal questions like "How much money do you have with this advisor?" or "How much money has he made you?" That information is none of your business and not relevant to your personal situation.
By Chuck Jaffe
Chuck Jaffe is a senior columnist and host of two weekly podcasts at MarkWatch. He has also been a guest speaker on several television and radio shows.

Copyrighted 2016. Content published with author's permission.

Posted in ...