5 Tips to Consider When Choosing A Financial Advisor

According to Meridian IQ there are 420,702 financial advisors in the United States. Do you have the right one?

Starting out as a financial advisor, my ideal client profile was anybody that could fog a mirror. I tried to serve everybody. Over the years I have realized that I am not suited to serve certain families, and, on the other hand, very well suited to serve others. One experience I had several years ago illustrated this point. I was helping a family in their 50’s with a financial plan to enable them to travel up and down the east coast playing golf for the rest of their lives. When I asked them if they had any charities they wanted to support, they responded that ideally they would like to spend every penny on themselves, but if there was anything left over when they died, they would give the money to a foundation supporting the gorillas.

After this meeting, I sat in my office chair, looking out the window in a daze thinking, “Am I going to spend my life helping people to play golf and preserve the gorillas?” While I certainly had the technical skills to create the plan they were looking for, I did not share the same worldview and was not excited about their goals. This was when I realized that I should focus on helping people that share my value system where I can be passionate and fully invested in what they are trying to achieve.

I would like to offer you 5 tips to consider to help ensure that you have (or find!) the right financial advisor.

1. Worldview

The way an advisor looks at the world will have a significant impact on how they will counsel you. There are two main worldviews a financial advisor will have: temporal or biblical.

Temporal Worldview Biblical Worldview
We made all the money, so we can do as we please with it. God owns everything and we want to know what He wants us to do with what He has entrusted to us.
It is better to keep than to give. It is better for us to give than to receive.
Getting rich and having more is our priority. “Life indeed” comes from being generous.
We are the master of our own fate. Our ability to make wealth comes from God and not solely from our own hard work or intelligence.

I have to admit that a few years back I never even took a financial advisor’s worldview into consideration. Now I believe it is of extreme importance. This is especially true if you are looking for a financial advisor who shares your value system.

2. Chemistry

This is an area that is frequently overlooked. We often focus more on competence than on chemistry. However, if you are going to work closely with someone – potentially for the rest of your life – it is vital that you connect well with him or her. If there is a good connection, your advisor knows what you want to talk about, and you see eye to eye on important issues. Chemistry either happens or it doesn’t. You can’t force it.

3. Character

How will your financial advisor counsel you if the optimal planning option would decrease their income? Does he or she truly have your best interest first in mind? Character is an attribute that you should look for your financial advisor to have and continually demonstrate. Character is often revealed during stressful times. The best way to determine character is to have detailed and high-quality conversations with your financial advisor and to observe how he or she leads their life.

4. Competence

Can your financial advisor lead you where you want to go? Competence is about being smart, technically capable, and a leader in their field. It is not only about knowing the tools and techniques to maximize your situation, but also the ability to ask the right questions. If your advisor does not know the right questions to ask, you will not obtain the right answers. To determine competence, you can ask the financial advisor how they have led families in situations similar to yours. You can also read articles and case studies they have written.

5. Consultative Approach

Will the financial advisor boss you around or work with you to accomplish your goals and objectives? A consultative relationship can be built only through a series of ongoing, in-depth meetings where the financial advisor and you work closely together to bring forth all essential information. Some financial advisors are willing to spend time on this, some are not. A way to gauge this is the number a contacts a financial advisor makes with you throughout the year and whether these contacts are focused solely on investments and planning issues, or whether they also demonstrate concern for personal/family-related issues.

Feel free to contact us if you want guidance in finding a financial advisor.

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