Instead of asking the financial advisor about what he or she will do for you in the future, prospective clients should ask what the advisor did in the past for existing clients, according to Jon Ekoniak, managing partner of Bordeaux Wealth Advisors, a financial services firm based in Menlo Park, Calif.
In addition, advisors who are talking with prospects should be ready to answer these types of questions with specific cases in mind, Ekoniak said in an interview.
The technique is called behavioral interviewing and it can give a prospect a much better idea of what to expect if and when he or she becomes a client, he said. It is based on the expectation that past behavior is indicative of future behavior.
“A lot of financial firms look and sound the same. The advisors say they do financial planning, estate planning and taxes. They also say they want to help clients to meet their life goals,” Ekoniak said. “But what does that really mean? Behavioral Interviewing focuses specifically on what an advisor has done in the past for other clients. This technique for interviewing differentiates firms.”
Behavioral interviewing has been around for a while and is often used for job interviews, but Ekoniak would like to see its widespread adoption for prospective clients when they are searching for a financial advisor. Bordeaux Wealth Management offers this type of information without prompting, but prospects should know the technique when interviewing other firms, he said.
For instance, instead of asking a general question such as if a firm handles clients’ taxes, the prospect should ask questions such as the following: Tell me about how you provide tax guidance. Do you do that for every client? Would my advisor give tax advice? If not, how often will I talk with the tax professional? Can you give me an example of how the tax professional proactively reached out to a client with a tax strategy? Do you produce tax projections?
Instead of asking if the advisor compiles diversified portfolios, the prospect should ask what that really means. Does it mean the portfolio is made up of equities that include a lot of different types of investments, or does it mean a portfolio made up of equities, bonds, alternatives and ETFs from emerging markets and developed countries?
Instead of asking if the advisor provides customized service, ask if he or she has helped clients find a mortgage lender when they were buying a house, he said by way of another example of behavioral interviewing. Knowing what the firm did in the past for existing clients will show the prospect what the firm is really capable of.
Using this technique helps prospects get past the clichés and buzzwords and learn what a firm truly has to offer, Ekoniak said. If a prospect does not ask these questions the advisor should be ready to offer the answers because it will show the prospect what the advisor can add to the financial planning process.
Bordeaux Wealth Advisors, which works high-net-worth clients. It serves about 200 clients and manages $4 billion, has created a two-page guide to help prospects ask pertinent questions and to make other advisors aware of what information they should provide, Ekoniak said.
“We provide information on how we have helped clients in the past, because we want the future client to know what he or she is getting if they hire us,” he said. “Advisors can easily say they provide certain services. A prospect should ask how they have carried out these promises with existing clients.”