MND: Operate Your Household Like a Business when Hiring a Financial Advisor

Here's another post in our series on the learnings from the book The Millionaire Next Door. A quote from pages 104-105:

Operate your household like a productive business. The best businesses hire the best people. They also patronize the best suppliers. Utilizing the best human resources and top suppliers are two major reasons the most productive organizations succeed while others fail. You should view all financial advisors who solicit you as a client merely as applicants. View them as prospective employees or suppliers for your household. Then ask yourself some simple questions: What criteria would a productive personnel manager use in evaluating each of these applicants? Would a skilled purchasing agent and/or chief financial officer of an organization buy investment information and products from this potential supplier? What criteria, what key pieces of background information, would be used to evaluate potential suppliers?

I'll go a step further -- don't evaluate them at all. You should be getting your potential financial advisor options from friends, not from cold calls. If you're looking for a financial advisor, ask friends and family members who are doing well financially who they use as an advisor. Then go and interview these financial advisors as if they were job applicants.

Comments

[thc]

This is all great advice. Another thing to keep in mind while you are interviewing an advisor is, the advisor is also interviewing you to determine if he/she wants you as a client.