Four Steps to Finding the Right Financial Advisor in 2018

With the holidays receding in the rear-view mirror, you look at the year ahead. In 2018, you say, you’ll save more often and spend more wisely.

That’s good! What is even better, though, is to craft a plan. Think about your physical health. If you resolve to improve yourself, you may not know exactly how to begin. Should you replace all your meals with diet shakes, kick down the door of the nearest gym and immediately try to deadlift twice your body weight? You’d end up in a hospital.

No, you would do research, watch some videos… and when you’re ready to take it to the next level, you’d meet with a doctor or a physical trainer. It’s the same way with your financial health. Crafting a budget is your first step. If you want to live richly, spending and saving in accordance with your values, you need to find the right financial planner.

This is easier said than done. How do you tell a highly-credentialed advisor from one who picked up some important-sounding acronyms from a quick, online course? For that matter, are credentials the only thing to consider? When you’re ready to take the plunge and choose a guide for your financial life, here are some guidelines:

Find a fiduciary

An advisor who abides by the fiduciary standard should be table stakes. By “fiduciary standard,” we mean advisors required to act solely in your best interest when providing personalized financial advice. You need to find someone who’ll put your interests above their own, or they may undercut your returns by selling you products with high commissions to line their pockets.

My suggestion is to seek out CERTIFIED FINANCIAL PLANNER™ professionals. A CFP® Professional not only abides by the fiduciary standard for financial planning services, but has also passed an exam culminating a period of rigorous education in finance and ethics. The CFP Board site contains a directory of CFP® Professionals by location, making it easier to find one near you.

Seek out guides, not inquisitors

Find someone who will go beyond simply telling you where to go and handing over tools for you to use on your own. If you’re lost in the financial woods, you need someone who can guide you and help you focus on what you can control, so you can retire on your terms.

What you don’t need, if you’re lost, is someone who rakes you over the coals for every financial mistake you’ve made, or will make. The perfect investor doesn’t exist. The right advisor will acknowledge your choices, even if they aren’t always the best choices you could have made.

Fire the know-it-alls

People who feel the need to be the smartest folks in the room can be entertaining as television characters. But it’s a lot less fun when someone with an attitude like Hugh Laurie’s Dr. House or Benedict Cumberbatch’s Sherlock Holmes is guiding your financial destiny.

The right advisor will keep open lines of communication. They can explain why they’ve traded your account in a particular way. They lay out the rules of the game well in advance, so there are no unpleasant surprises. Two-way communication is vital for a healthy, professional relationship with an advisor. If they make you feel like they’re stepping down from Olympus to talk to mere mortals, take your business somewhere else.

More than just a number

New innovative tools recently introduced to the financial services industry allow advisors to work with more clients than ever before. In spite of this trend, you want someone who won’t lose you in the shuffle.

A good sign your advisor has made you a real priority is when they want to understand your life. Do they ask about your professional associations? Do they talk about the roles you play in life as a parent, a manager, a caretaker, or a volunteer? I’m not saying your advisor needs to speak at your wedding, but if they care about you as a person, they’re likely to care about you as a client, too.

You’ll notice these recommendations revolve around “soft skills” and ethical concerns. That’s because a financial planner’s greatest strengths come from their understanding of your emotional connection to your money. The more an advisor makes an effort to understand you and work with you, the more they can help you make hard financial choices when life (or the stock market) yank the carpet from under you.

In short, the right advisor won’t just craft a budget, they’ll help you answer why you need it in the first place.

Paul Bennett, Ph.D, CFP®, is the managing director of United Capital’s Great Falls office. He is the author of the newly-released “The Money Navigator.”


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