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After almost 20 years working with financial advisers, I have learned a few things about what works and what loses clients.
When choosing a financial adviser, many investors are swayed by their friends’ and family’s idea of what makes a good adviser, such as big firm names, high returns or a long list of professional credentials.
While all of those can be nice, my big question is: Why does any of that matter?
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After years of experience, I boil it down to this: A good adviser is one who understands your personal financial situation. A good adviser understands your money story.
They listen to how you feel about money, how long you want to work and why, what you’re trying to do with your money now and in the future, and how money will impact your legacy.
They also understand your ability to handle risk.
For investors looking to start working with an adviser or find a new one, here are five items that should be on your wish list.
1. They should be a good listener
The number one thing I look for in a financial adviser is good listening skills. If an adviser spends the first meeting or two telling you about themselves and how they have millions of clients with great returns, I suggest crossing them off your list.
Within the first two meetings with a new adviser, they should get to know you on a personal level and understand why you’re coming to them and how they can help you achieve your financial goals.
While getting to know your adviser is important, reaching out for an initial call shows you’ve looked at their website and know enough about them.
In my opinion, the best advisers use the first couple of meetings with a new client to hear their needs, concerns and goals. They should then explain how they can help give you peace of mind in those areas and provide a road map for holding everyone accountable to the plan.
When an adviser truly listens to you, it’s a good indication that they will do everything they can to help you understand and achieve your goals.
2. They should be empathetic but also accountable
As life gets busy, not all investors have the time to manage their own investment portfolios, keep everything on track and protect what they’ve built. A good adviser understands that work, kids, travel — you name it — can keep you busy.
They will not only help manage your investment portfolio on a day-to-day basis, but also keep you accountable to your financial goals and help schedule meetings and check-ins to keep your financial life in order.
They will send you reminders to complete tasks and ultimately become your accountability partner.
3. They should meet you where you are
A good adviser will understand that most clients (not all — I see you, investment and engineering peeps) don’t want to go into the weeds on every financial definition and term.
But one of my biggest pet peeves is advisers who just talk to talk, or talk to look smarter.
It’s important for advisers to meet each client where they are in terms of detail and how technical they want to be on any one topic.
A good adviser will make sure they understand what the individual client wants to discuss, knows a client’s time is valuable and understands their needs win in the end.
4. They should be disciplined
Having a disciplined adviser is extremely important. An adviser should have a strong backbone in what they believe, why they believe it and how they will execute on every facet of the client relationship.
A good adviser is available for their clients when things are good and when things go sideways and is not afraid to have fearless conversations.
A disciplined adviser will help you stay disciplined in your investment strategies, especially when life becomes hard.
This also means that if you want to do something unexpected, such as liquidating your savings to buy a vacation home, the adviser will explain the impact and consequences before you move forward.
When determining whether an adviser is disciplined, every part of their practice should be executed consistently — from onboarding a new client, to servicing existing clients, to trading accounts and making investment decisions.
Every part of their business should follow a clear, repeatable process that their entire team adheres to time and time again. There is no room for improvisation when it comes to the adviser-client relationship.
5. Their firm should have a good reputation and a strong team
I love the saying that a team is only as valuable as its weakest team member. Finding an adviser who has a strong team behind them is very important.
Every firm structures its teams differently, but I think it’s essential for an advisory team to include multiple people with varying areas of expertise. This helps make sure all of the client’s needs are fully addressed.
While each team may be organized a little differently, I believe a strong team is comprised of:
- The lead adviser
- A junior adviser
- One or more client service professionals (our team has two)
- A trader
- A strong team of operations and investment professionals behind the scenes
This will help clients feel reassured their finances are being expertly handled.
While we’re focusing here on the importance of picking the right adviser, picking the right firm is equally important.
The firm’s ethics and culture should align with your values, and you should feel comfortable being associated with it.
To evaluate the firm, I suggest reviewing accreditations, audits, complaints and reviews to better understand its reputation and standards.
There are so many factors that go into selecting the right adviser, but my biggest piece of advice is to go with your gut. An adviser may check all your boxes, communicate clearly and genuinely understand what you’re trying to accomplish, but do you feel comfortable with them?
Selecting a financial adviser is a very personal decision, and fortunately, there are many excellent professionals out there. So don’t settle until you find the right one.
