Common Interview Questions For Financial Advisors

Question : Whose Clients Will I Be Working With

This is an important question for several reasons. First, it just literally tells you who you’re going to be working with. Is the person you’re going to be working with some other advisor in the firm? But it also starts telling you about the staff structure. Will you support one advisor’s clients? Several advisors? All the clients of the firm? You may even have a good follow-up to this, which is “How many clients would that be?” If the firm answers 50 or 100 or 150, then you’re going to have a lot of clients to learn from. If the firm answers 250 or 300 or 500, they’re probably not serious about financial planning, since too many clients for any one advisor and paraplanner to serve with any kind of in-depth planning relationships. And if the firm says, “Well, you’d be working with your clients, the ones you get,” run away fast. It’s not a financial planning job. It’s a sales job to get clients.

What Do You Consider As Your Greatest Weakness

This question is very common in job interviews. The recruiter wants to understand your greatest weakness. Dont point out any personal weakness, as it might put you in an undesirable position. So, stick to your professional traits.

Sample Answer

Well, just like every human, I also have my fair share of weaknesses. For example, I always get puzzled and restless whenever the deadline approaches. Thats why I always try to complete a task within the time frame. Also, I always like to prepare my work in advance. I dont consider myself that spontaneous.

What Kind Of Asset Allocation Do You Generally Prefer

This is one of the trickiest questions. The interviewer seeks to understand your decision-making abilities by giving some examples for allocation. So, use your experience and knowledge to evaluate the answer.

Sample Answer

I strongly believe that there is no ideal allocation procedure to follow as each business has its unique models. So, I prefer analyzing the companys current financial situation and then creating asset allocation to suit the needs.

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General Interview Questions For A Financial Advisor

In the beginning of an interview, potential employers often ask basic questions to determine your professionalism, values, work ethic and career goals. Here are 14 general interview questions a hiring manager may ask you during an interview for a financial advisor position:

• Why did you choose to work in finance?

• Why do you want to work for this company?

• What do you look for in a company?

• Describe your work ethic.

• What work environment is ideal for you?

• What type of clients do you work best with?

• How do you handle stressful situations?

• What are your career goals?

• What do you hope to gain from this position?

• What skills do you think you will bring to this position?

• What do you feel are your strengths and weaknesses?

• How do you prefer to communicate with your clients?

What Do You Think Is An Ideal Portfolio Construction

This is a bit of a trick question because the idea portfolio for any given client will be contingent on where they are in their life, what their near term and long term goals are, and what their underlying risk tolerance is.

The reason why this question is asked is really to see whether or not you preface your answer by saying that no singular portfolio mix is right for everyone. Instead, the portfolio construction process must be tailored to each individual client.

With that being said, whether a client has $100,000 or $10,000,000 most of the time they will be reasonably diversified with an emphasis on equities . So, a hypothetical portfolio for a middle-aged individual with a medium risk tolerance might be 40% domestic equities, 20% international equities, 10% government bonds , 10% cash, 10% in commodities, and 10% in a structured product.

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Describe Briefly About Your Experience

Here, the recruiter wants to know about your work experience so far. So, describe your past work experiences and various companies you have worked with.

Sample Answer

My professional career started during my MBA. I performed the role of a financial advisor for a start-up company as a part-timer. After completing my MBA, I started working as a junior financial advisor for Web Fresh. I worked there for two years. Then I switched to my next company called Eon. There, I worked for three years as a senior financial advisor.

Question : How Often Do You Typically Update Your Clients’ Financial Plans

The real question here is about whether the firm actually views financial planning as something they do on an ongoing basis or as a physical document they create, produce, and deliver once. But you can’t really ask them, “Well, how seriously do you take financial planning?” But you can ask, “How often do you update your clients’ financial plans?” If the firm doesn’t really spend any time and effort on ongoing financial planning, it’s probably not going to be a great opportunity for you to learn and do financial planning.

In practice, a lot of firms will say they do ongoing financial planning, but that may not be much more than, “We meet with our clients periodically, and they ask us some questions, and then we answer them.” Part of why you ask about doing financial plan updates is because there’s a little bit more work involved, and firms that are actually doing plan updates of some sort are much more likely to be serious about planning.

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What Guidelines For Asset Allocation Do You Recommend To Your Clients

Asset allocation helps a financial advisor plan a client’s future for managing money and long-term investments in stocks, bonds, shares and cash. This question can help a potential employer understand your knowledge of financial advising, the accuracy of your knowledge and your experience with the typical duties of a financial advisor.

Example:”While working with clients to discover the best asset allocation plan, I use a risk tolerance assessment to identify the client’s long-term investment goals, determine when they expect to use the money from their investment and evaluate a client’s view on investment risks by creating specific investment scenarios. I often recommend clients with high-risk tolerance to target 60%-70% stocks and 30%-40% bonds in their portfolios if they plan to invest for longer than a 10-year time frame.”

What Are You Most Proud Of In The Last 12 Months And Why

This question is intended to get a better idea of who you are as a person, and find out what youre passionate about. It could be an exam or paper that you worked hard for and did exceptionally well on. It could be a problem you solved in yourinternshipor your night job. It could also be an example from your personal life. This question helps the interviewer understand who you are and what you value. It also shows them that you have the ability to set and accomplish goals.

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How Does Your Experience With Technology And Computer Software Align With The Technical Requirements We’re Looking For In This Role

Several jobs in the finance industry require proficiency in using spreadsheets and relat ed programs. This is important for creating effective financial strategies and plans. A technically strong candidate can perform the core duties of the position without having to linger on the technical aspects. Here’s what to look for in the response:

• familiarity with spreadsheets and their various functions during previous employment

• excellent knowledge of spreadsheet features that apply directly to financial planning

• completed training, certifications or coursework that focuses on computer software proficiency

Example:”Microsoft Excel was a part of my daily duties at the finance and accounting firm that previously employed me. I learned how to calculate and execute the program’s financial functions with minimal effort and am now proficient. I have also attended several training programmes to keep my skills current in this field.”

What Are Your Strengths As A Financial Advisor

Example Answer: My strengths as a financial advisor are my ability to stay calm under pressure, my attention to detail, and my passion for helping people reach their financial goals.

I also have a lot of experience in the industry, so I can offer valuable advice to clients who might be unsure about what they should do with their money.

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Question : What Financial Planning Software Do You Use

Just ask. Are they using one of the major platforms, like MoneyGuidePro, eMoney Advisor, or NaviPlan? Are they using a newer solution, like Advizr or RightCapital? Or are they using their own homegrown financial planning tools in Excel that they built out over time? Almost any of those can be at least reasonable. Firms that built their own homegrown financial planning tools may be a little bit behind on the technology curve, but they’re taking planning pretty seriously if they put that much energy and resources into creating it.

But if you hear a response like “Oh, those financial planning things don’t matter. The software doesn’t matter anyway, so we don’t really use that stuff,” well, I think that’s a lot of the answer about how serious they really are about financial planning. And not to say that financial planning software projections are the be-all, end-all, but the number of firms that do really awesome, amazing, in-depth financial planning and completely throw the software out the door is very, very few and far in between. For most, if they’re not using the tools, it’s because they’re not serious about the planning.

Financial Planner Interview Questions

Financial Planners work closely with clients to set and meet financial goals. This role requires someone who is great at building relationships. Your clients should be able to trust them to provide sound advice, excellent customer service, and always maintain client confidentiality. Ask interview questions that help you identify the candidate that best demonstrates these abilities. For more ideas, see our Financial Advisor Interview Questions template.

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Company

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Question : How Does Your Firm Generate Revenue And How Much Of It Is Recurring

I think Jay made a comment about this on the Periscope earlier. The reality of financial planning is that if a firm is going to do deep, upfront, and ongoing financial planning , they need ongoing revenue. Their revenue should purely be financial planning services . Firms that generate most of their revenue from upfront product sales or commissions have a financial incentive to do the amount of work necessary to sell the product and move on. Unfortunately, they tend to focus less on deeper financial planning and ongoing financial planning. Firms that either charge for planning or have some kind of ongoing recurring revenue to support ongoing planning are better aligned and tend to do more planning work.

As A Financial Advisor How Would You Structure The Budget Of This Company

Here, the recruiter wants to know how informed you are about the company financially. So, do your research based on their published balance sheets and answer this question.

Sample Answer

The last published balance sheet of this company proves that it made a financial profit. So, I would first analyze the marketing goals, expenses, return on investment, income resources, and other factors. Then, I would structure the budget of this company for the upcoming year.

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What Certifications And Designations Do You Carry

Top financial planners carry specific designations that indicate they have mastered an area of their craft. The most common is the Certified Financial Planner designation, which requires passing an exam that probes your level of in-depth knowledge in a wide array of financial planning topics.

Answering that you have your CFP gives your candidacy an immediate boost. However, if you lack a CFP or other industry-specific designation, such as Registered Investment Advisor , highlight a concrete plan to study for the exams and obtain these certifications within a certain time frame.

The 2020 median pay for a personal financial advisor was $89,330.

Whether you currently carry industry-specific designations or have a defined plan to obtain them, either way, you let the interviewer know you are a serious candidate willing to invest in yourself and your future.

What Asset Allocation Will You Use

Youve heard how important it is to be diversified, right? Your asset allocation is how you create a diversified portfolio. It drives most of your returns, Finn says.

You dont want someone who is just going to pick U.S. large-company stocks, Finn says. Your portfolio should include domestic and international stocks, and small-, mid- and large-cap companies.

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Tell Me What You Know About

Some interviewers are going to test your specific knowledge about financial planning. They want candidates who require minimal remedial training and hand-holding. Therefore, it is important to study the ins and outs of the field and be prepared for any technical questions the interviewer might throw your way.

Worst-case scenario, the interviewer asks about a term with which you are unfamiliar. Do not panic. Also, do not try to sidestep the question. Oftentimes, people worm their way out of a question they cannot or do not wish to answer by mentally replacing it with the question they wish they had gotten, and answering that one instead.

While this tactic seems to work for politicians in televised debates, it is a bad idea during a job interview. Not only does it tell the interviewer you lack the answer, but it also makes you look oily and insincere. Be straightforward. Admit you are unfamiliar with the term and confidently state you are a work in progress, always learning and growing in the profession. At that point, demonstrate your value by offering a unique piece of information you do know.

Sample Job Interview Questions And Answers

Below are personal questions for the financial advisor:

• What qualifications and licenses do you hold?
• How long have you worked as a financial advisor and which firms have you worked for?
• Describe the services youve offered.
• How many clients have you served, what is their average portfolio, and what is the size of assets that you have managed?
• Do you take continuing education classes for financial advising?
• Tell us about your past performance.
• Why did you choose this career? What does it mean to be a financial advisor?
• What are the skills that allow you to be a successful advisor?
• Do you have references: clients, co-workers, and superiors?

Tips on answering the above questions: Talk about your educational background and the courses you have taken to develop your professional expertise. You should also describe your client base and your previous experience, such as financial planning, investment management, budgeting, tax planning, wills, retirement planning, and insurance needs. You may also refer to more investment details, such as large-capital funds, mid-capital funds, small-capital funds, and international investments. And of course, explain why you want to be in this field.

In case you are new in this trade, you can tell about your line of business prior to becoming a financial advisor, which may be relevant or similar to this profession.

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Who Is Your Custodian

Ideally, your financial advisor has hired an independent custodian, such as a brokerage, to hold your investments, rather than act as his or her own custodian à la Bernie Madoff, the notorious financial advisor who defrauded clients through a multibillion-dollar Ponzi scheme.

That provides an important safety check. If I send my clients performance information and it tells them how much I say is in their account, they can go online any minute and double-check, Finn says.

Share With Us Your Greatest Achievement

Through this question, the interviewer wants to tap into your greatest achievement in your professional career so far. So, mention the achievement that will put you in a desirable position.

Sample Answer

When I joined my previous company, the business didnt have financial stability. But my financial assistance and future investments helped the company reach a stable financial state. So, this is what I consider as the greatest achievement in my professional career so far.

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Most Common Finance Interview Questions

Weve compiled a list of the most common and frequently asked finance interview questions. If you want to ace your finance interview, then make sure you master the answers to these challenging questions below. This guide is perfect for anyone interviewing for a financial analyst job, and its based on real questions asked at global investment banks to make hiring decisions.

In conjunction with this comprehensive guide to finance interview questions , you may also want to read our guide on how to be a great financial analyst, where we outline The Analyst Trifecta.

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