1. Interviewing Techniques 2010 NASAA Investment Adviser Training Dallas, TX ________________________________________ Presented by: Darren Kearns CFP®

2. The Introduction Show identification Provide business card Provide letter of introduction Provide books & records request list Explain the exam process and estimated time period. Put the Interviewee at ease & help create their expectations

3. Initial Interview Interview the owner or principal officer What is the purpose?   To gather information about the IA such as type of business, services offered, personnel, investments, size, fees, operations, conflicts, affiliations, advertising, and solicitor relationships

4. Initial Interview Techniques   Use more open-end questions vs closed-end   Closed end “Do you advertise?”   Open end “What kind of advertising are you doing?” or “Tell me about your advertising”   Continue to put interviewee at ease. The more relaxed you are, the more relaxed they are (can help create a more cooperative exam)   Paraphrase answers to ensure understanding and avoid miscommunications   “So you have the client sign a receipt documenting that they have received the Form ADV”   Listen VERY carefully & take VERY good notes

5. Initial Interview Techniques   Never assume   Don’t overwhelm   Watch for nonverbal communications   “Actions speak louder than words”   Allow IA to ask questions   Don’t lead interviewee in questions   “You do offer the ADV annually, don’t you”   Document conversation

6. Keys to Success Always remain calm even when interviewee is upset Always be professional and polite Don’t be intimidating or talk down to the interviewee. This can result in a more guarded response Don’t get into a yelling contest or argument

7. It’s an Interview NOT an Interrogation

8. Cornerstones of Effective Communication Listening – Be empathetic, active and prepared to really listen Suspension of judgment – Try to see other’s point of view to achieve their frame of reference Feedback – Do not assume everything you say and they say are understood Understanding – Accurate reception and interpretation of a message Openness – Candid disclosure of findings, bad news and important facts. Let them know your going to find issues (no one is perfect)

9. After Initial Interview Ask for a tour of the office   Introductions to key contact personnel (operations, financial, etc.)   Location of books and records   Copier and workspace location   Restrooms Continue the examination

10. Characteristics of a Good Interviewer Understanding the interviewer is attempting to obtain only the relevant facts and is not “out to get someone” Does not appear to be a threat A people person and talented at human interaction Does not interrupt the interviewee Displays an interest in interviewee and what is being said

11. Body Language The evaluation of an interviewee’s body language can provide the examiner with insight of the interviewee Eyes can provide important nonverbal signs   Closing eyes, covering eyes, break in eye contact may suggest deceit Touching of face (touching nose, rubbing chin) is often a nervous reaction Blushing – Indicates increased blood pressure, indicating pressure or stress

12. Body Language Crossing of arms may indicate a defensive reaction Hands or fingers over the mouth may indicate deception Excessive perspiration, shallow or labored breathing is a typical reaction of dishonest persons Honest persons may lean forward when questions are serious

13. Verbal Clues Deceptive people often speed up or slow down their speech, or speak louder. Have tendency to cough or clear their throats Liars frequently will repeat the interviewer’s question to gain more time to think of what to say. “What was that again?” Dishonest people may add what they believe credibility to their lies, such as “ I swear,” “Honestly,” “to tell you the truth,” or “frankly” Generally honest people just say “yes” or “no”

14. Interviewee Attitudes TruthfulUntruthful CalmImpatient RelaxedTense CooperativeDefensive SincereOverly friendly, polite InflexibleDefeated CordialSurly

15. Common Mistakes in Interviewing Most common is made by novice interviewers in trying to impress the interviewee with their knowledge. This can make the interviewee feel threatened and result in guarded responses Not paying attention to verbal and non-verbal clues Failure to take good notes Failing to put the interviewee at ease

16. Interviewing Tips Create Rapport –   Shake hands in introduction – This helps breaks down psychological barriers   A little small talk before proceeding into interview   Gesture openly with arms, lean forward in a manner to indicate interest   Make eye contact – Personalizes communication and creates a more comfortable environment

17. Interviewing Tips Take your time & do not rush   Rushing will result in more questions than answers back at the office Practice, Practice, Practice Methodical   Think about ways to get answers and uncover information   Develop your own process that works for you Document answers clearly with as many notes as you need

18. Questions???

19. Armadillo Financial, Inc. ______________________________________________________________________________ Randy Mullikin as Examiner Darren Kearns as William B. Travis “Don’t let the market run you over”