This morning I read an interesting article “7 Ways to Pick a Better Adviser”.
Knowing how to work out a good from bad advisor seems to be the biggest challenge people face in getting financial advice. That’s certainly what most people tell me.
People come to my blog suspecting they are not getting the best advice from their current planner. And likeability seems to be an obstacle preventing many of them dealing properly with their advisor.
They may have been recommended an advisor by friends (who usually don’t have the ability to judge good advice, as ASIC has found). When they get their financial plan, a perceived bias, high fees or a lack of clear benefit makes them question the advice. They tell me they don’t want to proceed, but they feel obliged to the planner as they like them and appreciate the time they have taken.
I think your financial wellbeing is far more important than disappointing an advisor who hasn’t managed to come up with a recommendation you believe is best for you.
But rather than focus on how to break up with your financial planner, I want to pick up on an original and interesting idea presented in the article above – pick an advisor you don’t like. The logic being that they will work harder for you and, if you are not entirely happy, you can turn down their recommendation with less hesitation.
Personally, I think you can pick an advisor you like, but I do think you must pick someone who is willing to tell you what you may not want to hear. Give you tough love, so to speak.
People need advice designed to make them better, not make them feel better.
There have been times when I’ve remained firm on something I know is best for a prospective client, despite them wanting to hear differently, and then worried I’ve strained the relationship before it has even begun. In all cases to date, people have proceeded with my advice. And I usually get along with those clients better as a result.
I’ve had people tell me they lost trust in their planner after the advisor changed their advice to suit some new idea that client had researched and enquired about. Active v index funds is a common one.
Another idea presented in this article was checking out the advisor’s website to judge them. This may seem superficial to some people, but the article delves into detail about how effective this method can be. It’s much better than a suit and a firm handshake. The time and effort involved in maintaining a site with original and useful content, suggests an additional level of commitment beyond most financial advisors.
In my experience, a site that is full of corporate jargon and intangible client benefits results in advice that is similar. A site that looks cheap may well indicate an advisor who doesn’t take their business seriously.
I think people should look for an advisor who is committed to making it easier for people to understand when they are getting good advice.
On that note, contact me and let me know what topics I can write about that will help you the most.
And, join my email list for regular ideas on how to get better advice.