Great financial advisors can be hard to find, but when you do find the right one, it can be amazing.
It’s vital you get the knowledge and financial services you deserve when working with a wealth management team. Unfortunately, we continue to see advisors in the industry who appear to be providing only bare-minimum service to their clients. You should learn the difference between mediocre and super star advisor teams to ensure your family’s finances are properly taken care of.
With so many professionals and advisory options out there, how do you choose the right expert to work with? Trust is paramount. A trustworthy relationship with an advisor means knowing they have your best interests in mind with every recommendation and that they have the knowledge and experience to back up that advice.
It is important to watch out for the following red flags when working with a bare-minimum type of financial advisor. These can include minimal communication and you always reaching out to them instead of them proactively calling you. They rarely make changes to your portfolio because they have a buy and hold strategy and aren’t active managers who regularly review the risk exposure in your portfolio. They tend to use financial jargon that you don’t understand when you ask questions and they won’t talk about fees, giving you the feeling that they are “hiding” something. They also don’t provide you with a detailed financial plan and haven’t spoken to you about your retirement goals in detail especially regularly reviewing your income needs. Finally, they don’t work with your other professionals such as accountants and lawyers and there are no conversations about estate planning such as reviewing your wishes, POA or ensuring your wills are updated.
You built this wealth, you deserve to have it managed properly and your advisory team should be exceeding your expectations. There are some remarkable “super star advisors” that will go above and beyond to make sure that you and your finances are taken care of. This comes in the form of putting you (the client) first, providing you with a detailed financial plan to define your financial goals, and creating a portfolio that will help you reach those goals all while being transparent about fees. These advisors answer your questions in plain language, keep you up to date on the markets, and regularly meet with you to make sure you are prepared and on track. They have a clear understanding of your family dynamics and estate planning (such as wills and POAs) to better position you for the future while also taking care of you in the present. Continuously working with your accountant or lawyer to ensure a there is a unified picture of all of your financial needs.
And if you do not have such professionals already working for you, they will be referred to you to ensure that you are completely financially organized. Finally, super star advisors will provide you with sound investment advice and act as your guide when making investment decisions and provide you great long-term consistent returns.
Where to start
The initial meeting with an advisor is an interview for both of you to determine if there is a good match. Ask them for a customized investment plan that is tailored to your goals and needs, one that outlines all the fees you what you can expect if you decide to choose to work with them. Ask what level of communication you will receive, whether that will be portfolio reviews, market updates, or conference calls.
You should be able to understand their investment philosophy and risk management strategy along with the due-diligence they conduct for the portfolios they manage. They should communicate in a way that is simple enough for you to understand no matter how complex the strategy.
Are they a good fit for you
It is key to find the advisor who is right for you. That initial meeting should not be to sell you on their products or sell themselves but rather focus on you and your entire situation. They should be learning as much as possible about you and your family otherwise they will not be able to properly advise you on your money. I often say “you can’t manage someone’s money if you don’t know who they are!”
Trust is the key to any successful personal or professional relationship. Also ensure that they are proactive and very responsive as you don’t want to be waiting weeks for them to get back to your questions. There should be a strong emphasis on people, not products – about you, your goals and concerns. Lastly, they should be someone who isn’t afraid to say “no” or to give you their honest opinions on matters. Sometimes the hard truth is needed.
Finding the right wealth management team is extremely important to achieving financial success. Always make sure you are working with someone who puts your family’s needs first!
Lori Pinkowski is a senior portfolio manager and senior vice president at Raymond James Ltd., a member of the Canadian Investor Protection Fund. This is for informational purposes only and does not necessarily reflect the opinions of Raymond James. Lori can answer any questions at 604-915-LORI or firstname.lastname@example.org. You can also listen to her every Wednesday morning on CKNW at 8:40 a.m.