How Hard is it to Find Your Perfect Financial Partner?

Cern BasherBrilliant Insights, Getting Started

Finding the right financial advisor is like finding the right mate

Finding a financial advisor is a bit like finding a date. No, really, it is. Keep reading. When you go on a date you’re investing your time, and when you hire a financial advisor you’re investing your money, both of which are in limited supply. So, you want to ensure you make the right choice when undertaking both.

Find prospects through friends and relatives – Oftentimes the best way to find a date is through your friends or relatives. They know you and they know the person they think you should meet. It can also be safer than finding someone online or picking up a stranger in a bar. The same holds true for a financial advisor. Taking a recommendation from someone you trust and is in a similar financial situation as you will likely work out better than randomly selecting a firm or individual online.

Do your research – As well-intentioned as your friend or relative might be in connecting you with someone, it is still up to you to do your own research. They might not know that their recently single co-worker has a rap sheet three pages long, “he just seemed like such a nice guy.” Think of the number of people who recommended Bernie Madoff as a financial advisor to their friends. That didn’t work out so well. And if they say they’re certified, check with the organization that certified them to confirm they are actually certified and in good standing.

Make sure you’re looking for the same level of commitment – Are you looking for your next soulmate or someone to just grab dinner or see a movie with? Hopefully the person you’re seeing wants the same level of commitment as you. If you want a financial advisor to help you with everything from buying your first house, to funding your future children’s education, to allowing you to retire early, you’re going to want someone who is fee-based rather than hourly. On the flipside, if you only occasionally have a question about something, a financial advisor who charges by the hour will be fine.

Confirm you have common interests and ideals – There’s nothing worse than having a date who has completely different interests than you. The same is true of your financial advisor. If his ideal client is someone with millions in investments and you aren’t anywhere near there, chances are you will not be a priority. You may even be relegated to a call center where you have to talk to whoever happens to answer the phone. If you are on the lower end of the scale, like most people are, be sure you’re working with someone who will work hard to make your dollars count – no matter how few you have.

Find someone who will always have your best interest in mind – It’s not a good idea to date someone you only trust part of the time.  Your partner should always have your back, and so should your financial advisor. Fiduciary advisors are required to always invest your funds in a way that is in your best interest. Non-fiduciary advisors only have to do what is “suitable” for your investment needs, which can be a far cry from what is truly best for you.  Also beware of those advisors who can wear two hats – dually registered advisors – sometimes they act in your best interest and other times they don’t.  This is dangerous. After all, would you want your partner to be two-timing you? Make sure you ask this question: “Are you a fiduciary advisor in ALL of our dealings?” The only acceptable answer is an unqualified “yes.”

Finding a financial advisor is an emotional, as well as a financial, investment. Make sure you choose a partner who will provide the support you need and get you the results you want.

by Danya Karram, Principal