The Boomer couple to whom I introduced you in “Preparing Baby Boomers to Interview Trustees” is expanding their search for an investment advisor beyond those at corporate trustees. It’s not that their reasoning for initially confining their search to corporate trustees wasn’t sound. They just want to be sure that they’re not doing themselves a disservice by not talking with other types of investment managers.

They now have a series of interviews lined up with local investment advisory firms. The advisors run the gamut from smaller firms that cater primarily to individuals to fairly large organizations that have a broader clientele. References for these firms came from the couple’s advisors and some friends. 

Preparing Firms for the Conversation

Building on what they learned from the first round of interviews, the couple refined their approach and their list of questions. They also regrouped with their attorney and consulted briefly with their accountants.

The summary they prepared at the suggestion of their estate-planning attorney really helped to set the stage for the discussions, although some of the trustees apparently didn’t bother to read it or, if they did, couldn’t be bothered to alter their presentations in response. In any event, they’ll share the summary with the investment firms prior to their upcoming meetings. For readers’ convenience, here’s what went into that summary:

Their personal, financial, tax, and family situation;

A high-level overview of their estate plan;

Their primary objectives and concerns, that is, what they really care about and don’t care about:

    • To not outlive their money; and


    • To have a structure in place to deal with the challenges of aging, diminished capacity, elder care, etc.


They’re not concerned about leaving a legacy or planning for estate taxes after the death of the surviving spouse.

    • They don’t need to take income from the portfolio, for now anyway.


    • Their investment risk tolerance. They noted that they want to eat well and sleep well!


They’ll have visited your website to become familiar with your organization and its history, leadership and functional specialists, your services and the philosophy behind your delivery of those services. They’ll have reviewed your Form ADV and associated material and looked at the websites of your affiliates; and

They would like to hear about your firm’s succession plan. Of course, they would like to know if you’re currently in negotiation to sell the firm.

Revised List of Questions

The couple learned from the previous set of meetings that there’s no need to worry about whether the questions are posed in proper parlance, are in the right order or aren’t redundant or sufficiently probing on the given topic. The conversation itself not only tends to rearrange the sequencing as things go along, it also allows each question to set the stage for a much broader and deeper discussion. They’ll go with the flow, even if their list would make a professional consultant cringe.

    • How does the relationship start? What’s the onboarding process, step-by-step?


    • There are several advisors on your team. How do you select the advisor who will work with them, for example, what questions would you ask them in that regard?


    • How many clients does each advisor typically work with?


    • Portfolio construction and management:


    • How does the advisor determine their asset allocation and investment mix?


    • Is there a questionnaire or is it just from the conversation? If the former, can they see it?


    • Is the advisor’s recommended asset allocation reviewed by anyone before it’s presented to them?


    • Does the advisor prepare an investment policy statement (IPS) for them? Can they see a sample IPS?


    • What types of investments are primarily used in portfolios for clients like them, for example, individual securities, funds, exchange-traded funds, private equity, etc.?


    • Is the advisor required to populate their portfolio from a list of “permissible” investments? If so, who selects those investments? Who monitors those investments to assess whether they remain appropriate for their portfolio?


    • To what extent are individual investment decisions, the buys and sells, made by their advisor versus a centralized investment manager or group?


    • Do you put clients into your proprietary products? If so, how does that impact their investment management fee?


    • How is their cash handled, is it subject to the management fee and what does it earn?
        • On an ongoing basis, is their portfolio reviewed by anyone other than their advisor? What’s the scope of that review?



    • Based on what you know about them, how would you characterize the portfolio that you would construct for them?


    • What’s your investment performance for that type of portfolio?


    • What’s your annual fee to manage this type of portfolio?


    • How would you coordinate their income tax considerations into your portfolio management?


    • Their accountants would like them to get information about your tax reporting and how you would handle their questions at tax time. They said that you’ll know what they mean.


    • What’s your methodology and timetable for transitioning their current portfolio to the portfolio you construct? How would you take the tax implications of the transition into account?


    • How frequently and through what medium would you meet with them?


    • Can you show them sample periodic and year-end reports?


    • They like to check their portfolios frequently to see what they own and how they’re doing. Can you demonstrate your online platform or client portal?


    • Though they don’t expect this to happen for a few years, they’ll eventually need to take income from their portfolio. How will they do that?


    • What other services do you provide to clients like them, and what other capabilities do you have the would be of interest to them? Who provides those services and how do your charge for them?


    • What insurance do you and any relevant affiliates carry to protect their money from errors, omissions or commissions, whether human or technological?


    • What else should they know about you? What else do you need to know about them?


What Boomers Will Note

The couple learned a lot from their interviews with the trustees. By asking essentially the same questions of each of the trustees, they were soon able to pick up on the differences in the responses and make meaningful comparisons. For sure, it wasn’t just what a given trustee said. It was the way they said it. And it could all be summed up by these questions that they asked each other after every meeting. You’ll note that the questions are more about intuition than investing.

    1. Was the tone of the meeting,“We’re glad you’re here” or “You should be glad you’re here”?


    1. In the meeting, did they engage with both of us or with just one or the other?


    1. Did they incorporate their situation, objectives, and concerns into their presentation or just speak so generally that it wouldn’t have mattered who they were talking to?


    1. Did they talk to and with us or just at us? Would have been interesting to track their ratio of declarative to interrogative sentences


    1. At the end of the day, did we get the sense that we would be working with an experienced, dedicated team supported by a strong, secure and well-resourced organization?


    1. And, of course, the reality checks cleverly posing as a question. Would we be able to recite, in our own words, that firm’s value proposition? That is, would we be be able to complete this sentence, “We chose that firm above all the others for the following reasons…”? If not, then they probably didn’t complete it either!


The answers to those questions determined whether they would take the next step with the given firm. And those are the main questions they’ll ask themselves after the upcoming interviews as well.

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