Byron R. Moore* says there are three important rules to consider when you meet with your financial adviser.
Have you been burned when working with a financial adviser?
High fees, poor communication and a one-size-fits-all approach are common complaints heard from the dissatisfied clients of some advisers.
Mistakes made working with the wrong adviser can be stressful and cost you both time and money.
It’s far easier to avoid making a mistake in the first place than to try to fix one after it’s been made.
So, as you work with a financial adviser, here are three big things not to do:
- Believe everything an adviser says.
You should never enter into an important relationship (such as the one you have with a financial adviser) without a high level of trust.
If you suspect that your adviser might not have your best interests at heart, don’t stick with them one more minute.
Even if you have a strong relationship of trust, it is not permission for you to check your brain at the door.
Your adviser should be part-coach and part-teacher.
They should not only help you do the right things financially, but be able to communicate the reason why they are advising these things.
Ask good questions.
And if the answer comes back wrapped in technical jargon, ask for clarification.
Don’t be satisfied with a foggy, vague answer.
Work with your adviser to understand why you are being asked to do certain things.
It’s not too much to ask.
- Believe nothing an adviser says.
Once you’ve been burned (or at least disappointed), it may be a long time before you trust someone again.
While that is understandable, it is not profitable.
If you keep your adviser at arm’s length, never fully trusting them, your relationship will not produce the results you both want and need.
No adviser is perfect, but many are competent and trustworthy.
Keep searching until you find one who seems to be a good fit for you.
- Forget the difference between delegation and abdication to your adviser.
By my own, totally unscientific, estimate, the portion of the population who have the time, talent and temperament to do their own financial planning falls somewhere between 5 per cent and 10 per cent.
Everyone else, in my humble opinion, could benefit from outside professional advice.
What you are getting from any professional relationship, however, is assistance — not replacement.
I know of an adviser who tells prospective new clients, “I don’t want to care more about your financial situation than you do.”
When you hire a financial adviser, you are really delegating certain functions of your financial life to that person.
You have made the decision that it is worth the money to buy a portion of their time, talent and temperament to assist you in achieving your financial goals.
But never forget: It’s your money and your life.
Ultimately, you will reap the benefits or suffer the consequences for what happens.
You know you have crossed the line between delegation and abdication when you choose to never think about what’s going on with your money or choose not to meet with your adviser to find out.
Please don’t do that.
Stay in touch and stay informed.
Like it or not, your financial future is advancing toward you one day at a time.
If you are one of the many who could benefit by getting professional help in preparing for that future, don’t give up.
The search for the right adviser for you is worth it.
* Byron Moore is Managing Director of Planning Group at Argent Financial Group.
This article first appeared at www.kiplinger.com.
