35 Financial Advisor Interview Questions (With Answers)
Updated 30 October 2022
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Financial advisors provide guidance to clients on investments, insurance policies, tax saving schemes and retirement plans. A professional in this field conducts thorough research, assesses various risk factors, studies the market and prepares customised plans for a client. If you are interviewing for a position in this field, familiarising yourself with some commonly asked questions can help you in your preparation and increase your chances of getting hired. In this article, we list various financial advisor interview questions and go through some sample answers to help you during your interviews.
General Financial Advisor Interview Questions
The hiring manager may ask you general financial advisor interview questions to learn more about you and see how well your personality complements the company's culture. Here are some questions you can expect during an interview:
Tell me about yourself.
How would you describe your role as a financial advisor?
What are your greatest strengths?
Which aspect of your work excites you the most?
What are your biggest weaknesses?
Why did you leave your last job?
What interests you about finance?
What would your manager and co-workers say about you?
What have been your biggest achievements?
Which qualities make you the best candidate for this position?
Related: How To Become A Financial Advisor: A Complete Guide
Questions About Experience And Background
Financial advisors conduct market research, assess clients' needs and goals, recommend strategies and stay up-to-date with new policies and regulations. It is common for hiring managers to ask about your education and experience when evaluating your skills and expertise. Here are some questions you can expect:
What are some common strategies you use when selecting financial investments for your clients?
What information do you use to build a client portfolio?
How do you stay up-to-date with changing policies and regulations?
Have you taken any additional certification courses?
What skills or experiences have you gained from your last position?
Why do you want to work for our company?
How would you handle a client's unethical request?
How did you handle challenging situations with your previous clients?
How do you measure your success?
How do you handle stressful situations?
Related: How Much Do Financial Advisors Make? (With Skills And Duties)
Here are some in-depth questions that you may encounter during an interview:
What is financial modelling?
What tools do you use for financial planning?
Do you specialise in any particular areas of investment?
Can you talk about various investment strategies?
How do you manage risk?
Can you define a cash flow statement?
How do insurance policies differ?
What is discounted cash flow? How does it differ from comparables?
What is your experience with stock investments?
What are some investment strategies that work well during inflation?
Related: 15 Types Of Business Analytics Jobs Across Various Industries
Interview Questions For Financial Advisors With Sample Answers
Here are some common interview questions that hiring managers may ask you, along with sample answers:
1. Why did you choose to pursue your career in finance?
An employer wants to hire someone who is passionate about the job. They may ask this question to learn more about you and what interests you about this position. In your answer, explain why you chose this career path. Make sure you emphasise your commitment to the field.
Example: "I was good at mathematics from a young age. During my engineering, I took part in several mathematics olympiads and competitions. My fascination with the finance industry is because of my love for numbers and curiosity about how markets and economies function. Each day in the financial world is exciting and different. To pursue this passion, I also interned at a data analytics company where I provided support to data analysts in understanding financial data and applying various techniques to extract valuable information from it.
As a finance enthusiast, I am also intrigued by the stock market and the crypto industry. I have helped several small businesses make investment decisions and get a good return on investment. By joining your company, I can provide valuable guidance to clients, help them plan for their future and devise investment strategies to increase their ROIs."
Related: Build A Career In Finance By Applying One Of These 12 Jobs
2. What tools do you use for financial planning?
Hiring managers may ask you this question to learn more about your technological experience in developing a financial plan. List the tools that you are familiar with, along with their advantages.
Example: "In my previous workplace, I used two tools to prepare financial plans, keep track of my clients' portfolios, aggregate financial strategies and perform advanced investment analytics. I used AB Pro because of its simple-to-use interface and client-centric services. The tool helped in demonstrating various investment strategies and asset management plans, along with their ROIs.
I also made use of ZYM Financial for budgeting and cash management, through which I helped clients manage their finances. Using the software, I could create various repayment strategies for clients with loans and other obligations. This tool also helped me summarise all the strategies and create a series of actionable steps for clients to stay engaged with their financial plans. Being a quick learner, I can easily learn any other financial tool that the company prefers to use."
Related: What Is Financial Modelling? (With Benefits And Types)
3. What are some factors that influence financial planning? How do you handle them?
The interviewer may want to determine your capability to perform the duties of a financial advisor and your expertise in the subject. To answer this question, it is useful to examine several current economic risks and strategies for mitigating them.
Example: "Several factors that may influence financial planning include interest rates, monetary policies, supply and demand of commodities, natural calamities, exchange rates and macroeconomic variables. When devising strategies for clients, I strongly believe in the return of capital rather than return on capital. If necessary, I adjust my strategy based on market conditions and local and global news.
I ensure to diversify a client's portfolio in various asset classes, such as stocks, bonds and commodities based on a client's risk-return profile. In my previous role, I recommended younger clients to take a conservative approach to investment for two years and diversify their capital in assets such as gold, commodities and real estate with the possibility of a downtrend in the Indian stock market and stagflation."
Related: Format Of A Cash Flow Statement (With Methods And Examples)
4. What strategies do you use when managing a client's portfolio?
Interviewers ask this question to gauge your experience in handling investments in various asset classes, your ability to understand and mitigate risks and your expertise in devising investment strategies. Explain your strategy clearly and provide an example of a previous investment strategy that you used to maximise the return on a client's investment with minimal risk.
Example: "Before devising an investment plan, I conduct a few meetings with the client to assess their current financial situation, define financial goals, determine their risk tolerance and time period of investment and explain the ROIs in various asset classes. My aim is to explain the risks associated with each strategy, since financial markets have a tendency to fluctuate between periods of excellent performance and periods of negative returns. By creating multiple scenarios and performing a benchmark analysis, I help them choose a strategy that works best for them.
In my previous job, I prepared a medium-risk strategy for a couple in their thirties, which comprised 30% investment of their capital in mid-cap stocks and energy sectors, 10% investment in mutual funds, 10% in ULIPs that offer both insurance and investment benefits, a small part of their monthly income in savings schemes and 5% in direct equity. Their strategy allowed them to earn a higher return and made them less susceptible to inflation."
Related: What Is Investment Accounting? (With Duties And Salary)
5. If you work as a financial advisor in our firm, how would you prefer to communicate with clients?
Effective communication can help you build trust, keep clients engaged in their financial planning and establish long-term relationships with them. Interviewers may ask this question to learn how you explain financial strategies to clients, assist them with questions and establish trust.
Example: "Interacting with clients is the favourite aspect of my job. This involves understanding their financial requirements, discussing their plans and obligations, assessing their risk tolerance and formulating strategies to accommodate their needs. Providing them with financial planning and assisting them in securing their financial future gives me great joy.
I set up short meetings with my clients every month to discuss the progress and provide clarity on their investments. I also email them monthly reports with a summary of their portfolio and visual diagrams to help them understand it better. Since elderly clients may not be adept at using technology, I prefer face-to-face interactions with them. I find the process very rewarding."
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