How to Know if your Financial Advisor is a Good Match

by Justin Weinger on February 27, 2015

While not everyone has a financial advisor, other than their accountant, if you have one you know that they don’t come for free. That being said, having the best financial advisor for your needs and your financial situation is an obvious must.

Below are a number of “red flags” that might tell you your financial advisor, while possibly competent (and possibly not), isn’t the one for you. Enjoy.

Red Flag #1: You feel guilty whenever you think about finding another financial advisor

If you feel “trapped” because the social circles, as well as the business circles, that you and your financial advisor are both included in, are overlapping too much, and it’s because of this that you don’t want to hire someone different, it might just be time to do exactly that.

Red Flag #2: The person most excited about your financial goals is your advisor, not you

Frankly, the person advising you about your finances needs to be as open, honest and sensible as possible because, let’s face it, they need to be able to stick a pin in your balloon if your ego gets too overinflated and you start making bad financial decisions. If the person is overconfident, overzealous or over, well, anything, it’s probably time to find someone new.

Red Flag #3: The advice you get from your financial advisor is the same you can find on your own

Using a financial advisor means that you’re putting your trust in them, as well as paying them to handle your money better than you can yourself. If they aren’t doing that, or give the same overused advice that you can easily find on your own, you have to ask yourself if paying them the extra money is really worth it.

Red Flag #4: Youve been through a major life change and your financial advisor hasnt changed their advice

Let’s say you’ve just gotten married, divorced, had a baby or retired. If the advice your financial advisor is giving you hasn’t changed substantially because of the change in your living situation, it’s a sure sign that they aren’t  as interested as they should be in your financial health. As one well-known financial advisor says, when you meet with your financial advisor  it should feel like an ongoing conversation, not a surprise meeting.

Red Flag #5: You stick with your financial advisor simply because you dont want to go through the change involved with getting a new one

The fact is, transitioning to a new and, hopefully, better financial advisor isn’t that difficult. As a matter of fact, usually your new advisor will call your old one and get all of your paperwork from the old one.  It’s not nearly as big a deal as you might think and the law actually protects you from an advisor that might have ill feelings.


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