Meet some people who finally hit the wall and hired a financial advisor.
· A couple that started fighting about how much to spend on a long-awaited vacation, weren’t sure how much they could afford and then blew their budget which triggered more anxiety.
· After 15 years and 3 different jobs, a single mom had pots of retirement money with different employers and no idea how to make the most of it.
· A 40-something middle manager keeps buying stock based on tips from friends and news articles and realizes his portfolio is a mess.
Do you sound like one of these people?
"I finally caved. After years of trying to figure out my finances I decided I need help. After preparing for a vacation, I noticed that our emotions were getting the best of us and not only did we go over budget, we just threw the budget out the window. How much should I be spending on a vacation anyway? We work our butts off at our jobs and then try to balance family and lifestyle with that. I deserve this vacation.
Then I realized after grinding out at work the last 10 years, I left my retirement plans at my past employers. Is that the best option? And as much as I'd like to think I'm killing it in the stock portfolio I opened at my brokerage account, I probably have as many losers as winners. I'm throwing in the towel and need to find an advisor."
Does this sound like you? I've heard hundreds of stories of how people were just overwhelmed and needed to find more confidence around their personal finances. It's hard enough just to get to this point of realizing they need help, but now they need to choose someone. After spending 20 years in the industry, I wanted to share with you my experience on how people may choose an advisor.
When selecting an advisor, I would think that most people are looking for a long-term business relationship with that person. If that is the case, you'll probably be looking for the same traits as a personal relationship. You have things in common, relatable and easy to talk to. I've found though that these other items tend to rise to the top.
From years of being in the business, talking to hundreds of prospects- working with me or others, I've found that ultimately you have to trust the person you chose to be your advisor. This should then lead to an established connection as well as “getting a good vibe” from your initial conversation. One main reason for this is depending on your level of knowledge around money, you may have to put faith in the advisor and their recommendations. Without trust, that’s hard to do. Asking plenty of questions, learning the background of the advisor and getting to know them early in the process could help solidify this trust in the beginning. If you have trouble connecting on a personal level, or a voice in the back of your head is saying “I’m not sure about this person,” keep looking.
The person you choose to work with has to have the knowledge and experience to help you with your objectives. Whether that objective is you need a specific item like a Long Term Care policy or to rebalance you investment portfolio. More often people are looking to plan your overall financial strategy- that incorporates those items plus most everything else having to do with a dollar- from planning for retirement, monthly cash flow, ways to reduce taxes, savings rate and much more- that's where the intelligence and expertise of the right advisor stands out.
One item where you need to be careful is their education. Don't mistake all the letters behind their name as being the best option for you. Over the last 20 years, I've seen some of the top advisors out there with zero or just one designation. It's not that they are not experienced in the field, it could be they just didn't see the need for the designations. Or maybe their practice grew so quickly that they didn't have the time to study. I’ve also seen advisors where they have a ton of designations behind their names, but they didn’t have the best people skills to foster relationships. Ask them about their credentials, experience and scope of knowledge.
Looks Out for Your Interests
I've seen a study before that talked about the top two traits of a Financial Advisor. One was being a financial specialist, but the other was a person who always looked out for your best interest. Then when the study group had to choose which one should be the top trait, it was someone who looked out for the client first. Think about it, the advisor you choose could be the smartest person on Tax Savings During Your Lifetime. However, what if they know the best strategy for you but has had a rough month and really needs to generate more income. I agree with this study and it’s results and you have to find someone that will look out for your interest, whether they make money or not. If they steer you down one path where they get paid more, does it matter how intelligent they are?
Bottom line: Look for an advisor who speaks in terms you understand and who understands you.
Material discussed is meant for general informational purposes only and is not to be construed as tax, legal, or investment advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary. Therefore, the information should be relied upon only when coordinated with individual professional advice. Keith Taylor is a Registered Representative and Financial Advisor of Park Avenue Securities LLC (PAS) 6511 Park South Drive Suite 200, Charlotte, NC 28210. 704-552-8507. Securities products and advisory services offered through PAS, member FINRA, SIPC. Financial Representative of The Guardian Life Insurance Company of America® (Guardian), New York, NY. PAS is a wholly owned subsidiary of Guardian. Centerpoint Wealth Strategies is not an affiliate or subsidiary of PAS or Guardian. CA insurance license #0G13915. 2020-104726 Exp 07/22