What You Should Look for In an Advisor

 In Blog

Last week I made the case for why you should start your financial journey with a holistic advisor.

Today, let’s briefly talk about how to find the right holistic advisor and why your deeply held beliefs about what matters are likely rooted in marketing more than fact.

OK, before we get started, let’s get the elephant out of the room.  If I asked you to write down five words that come to mind when you hear “Financial Advisor,” I’m guessing a great deal of them wouldn’t be positive.  Here, I’ll give you a starter list: pushy, salesy, Bernie Madoff, etc.

Certainly not a great stigma.  In fact, financial services scores very low in public trust.  Yes, like all stigmas, they are rooted in some truth.  In this case most of that is historical vs. reality today.

The financial advisory business for retail investors (think: regular people) really exploded in the 1980s and like all new industries there were riches to be made and not a ton of regulation to help cull the excess.  I could write an entire article about the war stories I’ve heard from older advisors – suffice it to say it’s a good thing it doesn’t operate that way anymore.

Even still, there are bad Financial Advisors today just like there are bad doctors, bad engineers, and bad plumbers.  So how do you really know who’s going to be doing the right things for you.  Well, as someone newer to this space, I recommend the following when considering a financial advisor:

  1. Review their educational background – For the record, you can call yourself a financial advisor without ever going to college. Shocked?  Me too.  Assuming they went to college, do they have degrees in Finance, Economics, Business Management?  Ask them about their grades.  A lot of people scoff at this notion but seriously, do you want “C” level work when someone is managing your entire financial life?  I wouldn’t.
  2. Look at their credentials – The most commonly recognized designation for holistic advisors is the Certified Financial Planner (CFP) designation. I would insist that your advisor has this designation or is at least working on it if they’re a newer advisor.  There are a multitude of other more specialized designations as well.
  3. Verify they are supported by a team – I’m sorry but if your advisor is still a, “solo operation” I would be wary. Your advisor relationship will likely span decades.  They will know you better than some members of your family and that is critical in helping you maximize financial value.  So, what happens if you’re advisor gets hit by the proverbial bus tomorrow?  That’s a headache you don’t need.  Insist on a team that knows you and your situation very well.
  4. Ask them to review their service model with you – It should include regular communication and an emphasis on connecting you with the best specialists when necessary.

Conclusion: You are entrusting your financial health and well-being to your financial advisor, don’t sell yourself short by just choosing your “golfing buddy” or “the guy from high school.”  At least, not if he doesn’t meet the other criteria above.

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