Broker Check

8 Things to Remember When Seeking a Financial Advisor

| March 08, 2021
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  1. It’s your money. Whether you earned it or inherited it, it is not your financial advisor’s money—it is yours. Therefore, you must take ultimate responsibility for it, and make sure the person(s) that you choose to manage it sees themselves as a steward of your money. In other words, it’s not theirs. They work for you, you don’t work for them.
  2. You need your behavior managed more than your money managed. Oftentimes what makes or breaks a good portfolio isn’t the perfect selection of investments, but switching investment strategies constantly and moving in and out of investments on a regular basis. A good advisor should function as a check against emotional swings and keep you focused on a long-term plan.
  3. You’re coming for help. If you want to manage your own money and select your own investment strategy, there are all kinds of ways to do so. You’ve seen the commercials.  More power to ‘ya, if you want to go that direction.
  4. Consider being open about all your money. Do you have to tell an advisor everything? No, but in order for an advisor to serve you well, she needs to know where your money is at and what it is invested in. For example, should she really be recommending tech stocks, if your other portfolio is 50% tech? And how would she know if you don’t tell her?
  5. Consider having just one wealth manager. If you have monies in four different accounts with four different advisor’s opinions it can be very confusing for you and it can be very difficult for those advisors to advise you effectively. You must do your due diligence when choosing an advisor, but once you find a good one it just might be beneficial to let them manage your entire monies. Remember: you can always find another one.
  6. Be prepared to ask questions. Ask about how they manage money. Why are they recommending one set of investments over another? Ask about what broker-dealer they use and what institution is holding your assets. Ask about the fees that they charge. Ask about their families and life outside of work. Get to know them. After all, if they are good advisors, they should be getting to know you.
  7. Recognize that financial advice isn’t free. Your wealth manager isn’t doing pro bono work for you. They are charging you something. Be clear on what that is, and then be prepared to pay it. If you have a good one, it should be well worth it.
  8. Your advisor is not a magician. The market is filled with up and downs outside of your and their control. They are not financial prophets, and if they are acting like one, you may want to run the other direction. Sure, performance is great and important, but if you are a chasing performance you may get burned and you may be bringing expectations that are not realistic. Find an advisor that doesn’t act like a prophet, but sees himself as a planner on a mission to help you reach your long-term goals.
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