In my previous post, Do I Need a Financial Advisor, I discussed a few suggestions and scenarios in which an individual may need or want the services offered by a Financial advisor. If you have determined you need or want one, or already have one, read on to learn more about what to look for in a great advisor.
There are two main types of advisors in the financial space…
These roles over the years have evolved as the markets have become more efficient and clients’ needs have become more involved.
An investment advisor’s relationship with their clients is typically tied to their selection of stocks, bonds and alternative investments to generate a return that would help their clients achieve their long term goals. An advisor with a narrow focus on investments and monitoring a clients investment strategy to ensure it aligns with their needs.
A Financial Advisor/Planner will serve as an advisor in all areas and aspects of a clients financial life. Budgeting, insurance planning, cash flow analysis, debt and loan assistance, generational wealth and tax planning and the list goes on.
Investments are a crucial and necessary part of your financial life. But, in my opinion, a great advisor and team will serve as both your Investment Advisor and Financial Planner.
They will manage your investments, strategize about retirement planning, discuss saving for your kids college education, review all your assets and discuss areas to optimize or identify various financial opportunities for you.
They will serve as your ultimate financial resource; personalized and focused on you and your future.
First and foremost, you need to like who you are currently working with or who you plan to hire. This is a relationship. A professional relationship yes,….but the lowest bar to clear when choosing a financial advisor is, do you even like this person? Would you be happy and comfortable having personal and vulnerable conversations with this person? Do you trust them and their ability to advise on and do what is best for you?
Does the financial advisor have a team or institution around him/her to support you? I have seen it work successfully, but I am not a huge fan of a one man show. It leaves too much room for potential oversight and frankly I just don’t think that one person can be everything to everyone. So I like to see a team of at least 2-3 people there as a support system to one another as well as to their clients.
Whenever a prospective client came to me and I asked them why they weren’t happy with their last advisor or accountant, without fail, it was ALWAYS a complaint about a lack of responsiveness. You deserve and should require your advisor to be responsive to your requests and questions. And if you are not receiving that level of service currently or are already feeling a sense of unresponsiveness in the hiring process – move on.
You never want to feel like you need to schedule 3 months in advance to be able to talk with your advisor. You want to know they are available for you as things come up in your life and may have an element of urgency to them. You want an individual and a team that make you feel like you are a priority.
If I were on the hunt for a financial advisor, I would want an individual and a team who would be able to assist me with any and all of the below options:
As noted above, you want to hire a Financial Advisor who is your ultimate financial resource.
Any time we hire someone who will be guiding us and managing an aspect of our lives that we aren’t experts in – it requires a level of transparency to successfully have a healthy, trusting client and advisor relationship.
They should be forthcoming and transparent about their team, their process, and especially as it relates to you and your assets.
Are they providing you with all the information you need to understand how you are invested and why. Will they share how your investments performed on a regular basis or why they opted for one investment over another? Are they clearly identifying their action steps that they will take to help guide you towards your financial goals and are they following through?
If you feel as though they are breezing through the information or dodging your valid questions, I suggest you push back and ask again. If you continue to not understand the suggestions, the path you are on with your assets and you do not believe anyone is taking the time to explain that to you – I’ll say it again, start looking for another advisor.
at the time, according to Barron’s.
And I remember thinking to myself at one point, these clients are so lucky to have us.
A team of individuals that spent hours and hours on end ensuring that they were doing everything in their power to do what was best for their client. Help advise a client on how best to manage their assets, how to plan for their retirement, help talk with the next generation about wealth, pick up all the financial pieces after a death in the family or divorce, etc.
A team who answered calls and emails whenever needed. Lost sleep over the stress of making sure they were doing everything they could to make the financial life of their client better. Sometimes even caring more about a client’s financial life and future than the client did.
And although I am fully capable of managing all of the above for myself, sometimes I think….wow, it would be really nice to have one those great advisors handling everything for me one day!
Not everyone needs an advisor. But if you do, take the time to interview a few. Ask your friends and family who they use and are they happy with the level of service provided to them. Do not rush into hiring someone because you feel it’s something you have to do – find the RIGHT person who is the RIGHT fit for YOU!
Financial Advisor Series – Part 3 – What To Ask a Financial Advisor in the Hiring Process coming next week!
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Financial Advisor Series – Part 1 – Do I Need a Financial Advisor?