Choosing Your Advisor

Choosing a financial advisor is a significant decision. It’s a decision that shouldn’t be made hastily or haphazardly. We’ve already recommended that your advisor should be fee-only, independent, and a fiduciary. But are there any other questions we should asking or things we should be evaluating?

Questions to ask yourself

Do I have the complexity that requires an advisor?

Often times individuals don’t have enough complexity in their personal finances to warrant hiring a financial advisor at that stage in their life. For example, if you’re just starting to build you financial foundation you may simply need to focus on budgeting and tracking expenses, getting out of debt, and building short-term reserves. There are a plethora of resources that address these things that will set you up well.

Do they share the same beliefs and values as me?

Having shared beliefs and values is imperative because of how personal the relationship will be. By having the same values and beliefs, an advisor can often provide guidance and an unbiased perspective in relation to those beliefs. Remember, it’s our beliefs that drive our behavior, whether financial or not.

Do I feel there’s a good fit? Do I feel optimistic working with them?

You can have shared beliefs and values and still feel like there isn’t a good fit. Enjoying your interactions with them is important because they will be frequent and often significant. A prosperous relationship, and partnership, is two fold and is built upon commitment, trust, vulnerability, and transparency.

Do they have the expertise that serves my needs?

There are many “generalist” advisors out there that will serve everyone with a surface level approach. However, YOU deserve an advisor that is experienced in serving people that have your specific problems and desires (no matter what they are).

Do they have a well defined financial planning process?

A great financial planner should have their financial planning process dialed in to execute with their clients and prospects. They should also be able to procure the details about what that process looks like so you should definitely ask about it when interviewing advisors. Financial planning works best with a well defined structure when reviewing, analyzing, and implementing recommendations.

Can I afford them? Do they provide significant value above their cost?

The first thing many people do when researching a financial advisor is look at their fees. I get it. You want to know the cost and to know if you should spend any more time going down the rabbit hole. First, you do need to be able to afford the advisor in whatever way they assess their fees. However, rather than evaluating an advisor solely on cost you should be evaluating them on the VALUE that they can provide you. Warren Buffet has been coined with saying, “Price is what you pay. Value is what you get.” Cost means nothing without the context of value.