8 Signs That You Need a New Financial Advisor

Oftentimes the writing is on the wall when it comes to putting an end to a relationship. Other times, the evidence is a little more discreet and subtle.

When it comes to your financial advisor, there's no reason that you shouldn't be completely satisfied with your advisor. Especially in our day and age where technology has better equipped advisors and expanded the pool of advisors that you can choose from.

Note: If you don't currently have a financial advisor then these items are great for screening potential advisors.

Here are 8 signs that you need a new financial advisor.

They aren't listening to you

There's nothing more discouraging than when you're heard but not understood. And furthermore, when someone isn't interested in understanding you. When it comes to your personal finances, you deserve someone that will listen and take the time to fully understand where you're coming from.

The reality is that a proper solution can't be prescribed without a proper and thorough diagnosis. How would you feel if you visited the doctor for a medical issue only to have them prescribe you a treatment plan without running any tests or asking you any questions?

A great indicator of an advisor that listens well is if they’re able to repeat your concerns in detail and if they ask for clarification.

They obscure things

The financial services industry has been notorious for complicating things more than they need to be. Often times this is a calculated move so an advisor can seem "knowledgeable and overly competent".

However, if an advisor can't maintain a degree of simplicity and clarity for their clients then the client will lose every time. As a client, if you don't understand 100% of every strategy being implemented on your behalf then you should reconsider advisors.

Note: Many situations aren't "simple" but I'm more so hitting on the fact that advisors intentionally make matters convoluted in order to strategically position themselves for their gain.

“It is difficult to get a man to understand something, when his salary depends on his not understanding it.”

Upton Sinclair

They are poor communicators

Perhaps one of the biggest factors of discontentment among clients is their advisor's lack of communication with them. As a client, you should always be in the loop about progress, processes, and outstanding items.

Now, I understand that advisors can't keep their clients 100% updated in real time but you should always know the status of aforementioned items and the responsibility of whose those items are.

Also, advisors have phone, text, email, and video message at their disposal to keep clients updated. There’s hardly an excuse for lack of ways to communicate with clients these days.

They aren't independent, fee-only, and a fiduciary

We're a little biased but we feel your advisor should be independent, fee-only, and a fiduciary. By possessing these three key features you can rest assured that they've positioned them self in a way to put their clients first.

This isn't to say that all good advisors will have all three qualifications. But you can have a degree of peace when an advisor does possess all three.

When an advisor isn’t independent then their allegiance can sway to the party they “work” for.

When an advisor isn’t fee-only then the advice that you receive could be conflicted and tied a specific financial product.

When an advisor isn’t a fiduciary then they aren’t legally, or ethically, obligated to act in your best interest.

You're paying for more than what you're getting

You’re getting the unfair side of the deal when you aren't receiving enough for what you're paying for. PSA to always know what you're actually paying.

It only makes sense to work with an advisor if you're receiving value above and beyond what you're paying to access their services.

Plenty of advisors are providing a ton of value to their clients through their expertise, well designed systems, and top notch service. This is one of the primary benefits of working with a great advisor.

“Price is what you pay. Value is what you get.”

Warren Buffett

In other words, value is everything you get above what you pay for.

They aren't specialized in your niche

In business, there's a saying that "The riches are in the niches". This is to say that there's demand for solving very specific problems for very specific people.

Because your personal finances are very unique, you likely fit into a specific niche, or specialty. It's key to work with an advisor that specializes in serving your specific needs. It's the only way you know you're getting the best and most customized advice for your personal situation.

By working with a generalist (an advisor that works with anybody), you can bet that you're advice will be general in nature. In fact, it’s the only way a generalist can stay in business is by working with anybody. If you’re receiving similar advice that another client is receiving then you know you’re working with a generalist.

They only talk about investments

Don't get me wrong, investments are important. They just aren't only important piece of your financial life. And honestly, so many areas of your financial life need much more active attention.

You need a financial planner, not an investment manager. A great financial planner will be able to address all the areas of your financial life in a comprehensive way. When your advisor only talks about investments you miss out on valuable areas of your financial life that you can be planning and optimizing for.

Note: Some financial planners will also manage your investments.

They have a disciplinary history

Financial advisors go through training and education to get to where they are. In that journey, they learn what unethical conduct is and have to agree to conduct themselves in an ethical way according to their particular standard (i.e. we operate under the fiduciary standard).

When advisors choose to act unethically they can do severe damage to their clients. An advisor’s integrity should be of the utmost importance when determining who to work with. You can always check an advisor’s history out at FINRA’s BrokerCheck.

Conclusion

Deep down inside you may have already had a feeling that you need to seek out a new advisor and the reasons above may have just been an affirmation of that feeling.

When it comes to your personal finances you deserve to be 100% confident that you’re working with the right advisor. If your current advisor checks any of the boxes above then you owe it to yourself to do your due diligence.