When it comes to hiring an asset management firm, you need to trust that the professional you’re relying on will provide you with sound guidance and advice. For this reason, it’s important to have a conversation with any asset manager you’re considering working with. You want to ensure that they understand your tolerance for risk and financial goals, and that you understand their investment process.

Ascertaining this information up front can help you avoid conflicts and problems in the future. In your conversation with a prospective asset manager, be sure to ask how they are paid, how long they’ve been in business, and how they communicate with clients. Beyond these basic queries, read on for some additional questions you might ask when meeting with an asset manager for the first time.

1. What is your investment decision process?

You should have a basic understanding of the process that an asset manager uses when making investment decisions. Most asset managers will fall into one of two groups. Those in the first group believe that rules should govern all investment decisions, and they often rely on algorithms to guide their investments. They trust mathematical models to help them avoid some of the biases and other common pitfalls involved in human decision-making. (The behavioral finance field has explained in detail how biology contributes directly to these errors in judgment.) The other type of asset manager focuses largely on intuition, experience, and personal research in making investment decisions. This camp believes that misuse of investment models has caused market misbehavior in the past and blindly following quantitative models can increase risk. Neither approach is necessarily better than the other, as long as it aligns with your own philosophy.

• When has your investment process failed?

Most asset managers will try to minimize their failures and instead focus on their successes, but this can be a dangerous trap for the prospective client. When you ask an asset manager about their failures, you can figure out how they’ve learned from their mistakes and what they’ll do to avoid them in the future. Usually, asset managers who choose to sweep their failures under the rug are doomed to repeat them. In contrast, it’s a good sign if an asset manager can speak honestly and analytically about their past missteps. No asset manager is perfect, because no investing philosophy is flawless or absolutely guaranteed to produce returns. Unlikely and unpredictable events happen all the time and catch even the most astute investors off guard. When asset managers deflect questions about past mistakes or seem overly defensive, you may want to look for a different professional.

• Have you worked through a whole market cycle?

Asset managers can make their performance seem more impressive than it really is if they only highlight results during a particularly good market. A skilled asset manager will be able to maintain stability even through a market that is trending downward. Ideally, you would evaluate the performance of any prospective asset manager over several market cycles. When asset managers perform well throughout a market cycle, that indicates they can offer extreme value to their clients. However, it’s still possible that the manager simply got lucky. Ask further questions about how they adjust their strategy to account for both bull and bear markets. If the asset manager can clearly articulate this information, then their success is probably not just luck, and they will likely be able to repeat it in the future.

• What questions do you have for me?

One of the most effective ways you can judge any asset manager is by the questions they ask you. That’s because communication is a major part of the asset manager-client relationship: an asset manager with intelligence, skill, and experience may still not work well for you if they can’t communicate. Managers need to have a clear understanding of their clients’ goals, risk tolerance, and investment philosophy. A lack of questions or any problems with communication should raise a red flag. In addition, you ideally want to work with a professional who truly cares about your financial goals and is interested in helping you meet them. If your conversation with a prospective asset manager feels one-sided and as though they’re uninterested in learning more about your needs, this speaks volumes about their priorities and commitment to their clients. You may be better off with someone else.

• How efficient do you think the markets are?

This question can help you determine the type of counsel an asset manager will provide. When asset managers believe that the markets are efficient, or at least more efficient than not, they typically advise their clients to buy and hold a range of different types of assets. This advice is underscored by their belief that assets are generally fairly valued. On the other hand, when managers think that the markets are essentially inefficient, they usually believe that certain assets are undervalued, and others are overvalued. This type of asset manager tends to act opportunistically and could generate returns higher than the market average. However, this type of investing involves greater risk. Some people may be more comfortable with the buy-and-hold approach, but they need to be prepared for returns under the market average some of the time. What’s best for you depends on your comfort with risk and your financial goals.