Navigating your financial life can be overwhelming at best and for those who hire financial advisors to help; kudos to you. Hiring is the easy part of working with a financial advisor but it’s just as important to know when to pull the plug. Make sure you look for these five signs to determine if it makes sense to find a new financial advisor.
1) Your advisor won’t talk about fees
There are endless ways that a financial advisor can charge for their services and while there isn’t an inherent “wrong” or “right” way to charge, it is vital that your advisor have the conversation about fees with you. This doesn’t mean that you need to be fee sensitive and go for the lowest cost option; it’s all about value for cost. At very least, your advisor should be able to articulate how he or she is getting compensated, any fees you’re paying with products or investments you have, and what services you’re getting for that cost.
2) Your advisor doesn’t prioritize you
You likely meet with your advisor only a few times a year and that is often more than enough, however the importance of this reason has more to do with when something comes up. It may seem acceptable that it takes a day or two for your advisor to return your call when everything is going right but when something major happens and you need him or her right away, you need comfort that he or she will return your call promptly. You are not just a number; you’re a paying client and deserve to be treated as one. Period.
3) Your advisor doesn’t get to know you
It may not seem intuitive that your advisor should know you on a personal level, however, if he or she is going to be putting your money to work, it’s important that he or she can understand your hopes, dreams, risk-comfort, and generally how you react to change. Having a good relationship with your financial advisor requires trust on both parts and trust can’t be formed overnight just by signing a contract. He or she should make an effort to get to know you and your family before bringing you on as a client and continue to do so through the entire relationship.
4) Your advisor doesn’t educate you on what he/she is doing for you and why
Your advisor should be your financial partner first and foremost, which requires your input as well as your collaboration. The recommendations a financial advisor provides are only valuable if you understand why those recommendations are important for you (“the why”) and you’re able to implement them (“the how”), whether it be on your own or through the financial advisor directly. He or she should also be able to explain all of this simply and without too much technical jargon so that you can actually absorb and understand the information.
5) Your advisor doesn’t “vibe” with you
While you don’t have to be best friends with this person, he or she is responsible for helping you and your family build their vision for life. The word “vibe” elicits some ambiguity since there isn’t a science to it and it can’t be measured quantitatively but the truth is that there are just some people that you’re more comfortable with and in which you have a better relationship. It’s absolutely necessary that you’re comfortable speaking your mind, asking questions, and truly partnering with your advisor. Typically, clients who share the same values of their advisor “vibe” a little better so make sure you seek out the right person.