By Ian Harvey
In 2015 I was searching for my next opportunity that would allow me to experience my dream of living and working in New York City.
I wanted to be in the thick of things – renting an apartment (albeit 700 square feet split between three friends), riding the subway, working in midtown, experiencing the city that never sleeps, and “making it.”
In the words of Frank Sinatra, if you can make it here, you can make it anywhere! Once I received interview opportunities, the true preparation began. I realized then, the true importance of reading and understanding a firm’s ADV, delineating between what I found on the website and what they reported to the SEC, and providing myself with a chance to ask the most pertinent questions.
While a crucial step, understanding an ADV is not as intuitive as one may hope. With this in mind, below are my thoughts on where to begin.
For starters, the ADV is our profession’s set of public disclosure forms, available to anyone willing to read through the information. Once on the public disclosure website (adviserinfo.sec.gov) search for the firm you are interviewing with and find all three disclosures:
The latest form ADV filed (the full ADV)
Part 2 Brochures (what they provide to all clients)
The relationship summary (new as of June 2019)
Where To Start
I recommend beginning with Part 2 and the relationship summary as they are much easier to distill. After reading through each document, you should be able to glean a top line understanding of how they manage portfolios, which services they provide, how the firm is compensated, organizations they partner with, etc.
You will likely formulate some questions which may be answered when you review the full ADV. If not, these are great questions to jot down and bring with you to the interview!
After reading through the well-formatted Part 2 and relationship summary, it is time to read through the latest form ADV. Please note, this disclosure is dense and can be difficult to understand at first.
Over time, and as you read more ADVs, they become easier to scroll through and find the information for which you are searching.
Things To Consider
I typically search the ADV for a few main items:
• Where are they located? Is there more than one office?
Interview thoughts: If there is more than one office, how do advisors interact with one another? Do employees transfer between offices?
• What is their AUM and how many clients do they have?
Interview thoughts: What is the typical client size? How do they segment their clients and firm offering?
• Do they work with non-profit organizations or retirement plans?
Interview thoughts: If so, how do they work with these types of clients? If not, I would be curious to learn more about why that may be.
• How many employees are working in an advisory capacity?
Interview thoughts: You now have context to formulate questions regarding workload expectations for the role to which you are applying?
• Are they employee owned? If so, which employees are owners of the firm and in which general percentage?
Interview thoughts: If the opportunity presents itself, you may be interested to know if becoming a partner is an opportunity at some point down the line. If so, is there a career track in place? Separately, if they are wholly owned by a separate entity, you may ask questions around how their ownership structure impacts their day to day work.
• Where do they custody client assets?
Interview thoughts: Perhaps you have worked with their current custodians at a previous firm and can demonstrate that experience.
• Do they have a privately managed investment fund?
Interview thoughts: If so, how do they manage such a fund? Do all clients have access?
• Are there any disciplinary disclosures?
Interview thoughts: To me, this information is important to know and ask about with caution. Without the full detail of particular circumstances, such disclosure information may, or may not, be material to your potential employment.
To me, this information is important to know and ask about with caution. Without the full detail of particular circumstances, such disclosure information may, or may not, be material to your potential employment.
Once complete, take stock of the questions you have written down and consider which questions are most relevant to you and this opportunity. Bring your questions with you to the interview and when given the opportunity, ask them in a manner authentic to you, which also gives them an opportunity to clarify any concerns.
When the interview is over, you will leave knowing you gave everything you could to this process and it is time to let the chips fall where they may.
Originally from the Jersey Shore, Ian lives in Manhattan. A graduate of the Financial Planning program at Virginia Tech, he earned his CFP® in 2014 and has always operated as a fiduciary advisor for clients. He co-founded the Financial Planning Association’s (FPA) Student Chapter at Virginia Tech, which grew to be the largest student organization in the country in its first year.
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