What would having your dream financial advisor look like?
You don’t necessarily have to love meeting with your advisor. After all, these meetings typically include discussions about issues such as taxes, basis points, pie charts, retirement, and estate planning. You should, however, feel like you can trust your advisor and that they are fighting for your success.
I recently had an interaction with a new client where I not only felt that she was my dream client, but also that I was her dream advisor. She came to my office for a free consultation and began asking me if I fit within certain parameters lined out in Dave Ramsey’s “hiring an advisor” blog.
Her: “Are you a fiduciary?”
Me: “Yes.”
Her: “Do you get paid in commissions or fees?”
Me: “Fees. If I were to get paid in commissions then you might always wonder why I’m recommending a particular product or course of action. Since you’re paying a flat fee for financial advice or a percentage fee for asset management, you can feel confident that I’m giving you the best advice, and that I have no ulterior motives.
Her: “How are you going to invest my money?”
Me: “We will determine your risk tolerance and then I will put you into one of our models that consists of bonds, stocks, precious metals, REITS, large cap, mid cap, small cap, and international mutual funds. Having these different asset classes will help protect you in the event of a stock market downturn, but will give you exposure to growth, allowing your money to grow at a strong pace now, into, and through retirement.”
Her: “I make too much money. How can you help me keep my taxes down?”
Me: “We will do everything we can including maxing out your (REDACTED—this is what you pay me for).”
After chatting for about 90 minutes and discussing her personal financial/life goals she signed a client agreement, gave me permission to transfer her assets from her former advisor, and then I gave her a copy of my book.
She came back a week later for another meeting and had read my entire book—I thought to myself, “she really is my dream client!”
If you aren’t thrilled about your relationship with your advisor, or at the very least, neutral or tolerant of it, then you should consider getting a second opinion on your portfolio.
A dream financial advisor is someone is on your side, knows your personal financial goals, is compensated to win when you win, and has the knowledge and tools to help you get where you want to go. Accepting anything less than that is a mistake. Life’s too short to stay with an advisor who isn’t on your side.