How to Find the Right Financial Advisor


A Guide to Picking the Right One for You

Given the complexity of issues, investments, laws and markets, more and more people are turning to Financial Advisers to help navigate the many challenges and obstacles that can prevent you from creating the future of your dreams.

Over the last six months, I have seen a number of new and prospective clients with existing investment relationships that don’t seem to be getting what they need from those relationships. While most of these folks tell me that their wealth managers and investment advisers are smart, caring or nice, what strikes me is the disconnect between the adviser and what the client is trying to achieve.

Does This Sound Like Your Adviser?

Here is an example of what I am talking about; last year a very nice woman in her 60’s, who was recently divorced after 30 years of marriage, was referred to me. She asked me to review her financial situation and help her with her transition to retirement and the associated strategies. She was looking for a big picture perspective over her finances. During our initial meeting she indicated that she was pretty conservative, describing herself as a 3 on a scale of 10 as far as her “risk tolerance.” She wanted no more than 10% of her money to be invested where she had a risk of losing principal. Her stated main objective was “To live comfortably and not lose my money.” This was quoted directly from her Thought Organizer, (the form we have all new clients fill out so we can better understand how they feel about money, retirement, and their financial goals) which she completed before our first meeting.


Who’s Really Listening to Your Concerns?

To summarize her objectives and concerns, she was looking for income to support her retirement lifestyle and didn’t want to worry about suffering significant losses or having to monitor or adjust her portfolio on a regular basis. Well, she had two investment advisors she was working with. Each of them had allocated her money into a separately managed account run by specific managers. Neither adviser had done much to solve her need for income, although one manager had put a significant amount of money in a variable annuity with an income rider which will provide guaranteed lifetime income to her. Outside of this position, both advisers had her exposed to significant risk levels by investing in oil pipelines, small cap mutual funds , junk bonds and emerging market funds. When I pointed this out, she went back to the investment advisers and relayed her concerns.

One adviser made changes to the portfolio and increased the amount of bonds held to turn the focus to income and reduce volatility, the other one just said “this is what we do for clients; we can set up monthly liquidations for you to withdraw.” This response came after many calls and emails that were not returned. This isn’t the proper place to explain why making monthly liquidations from a stock or mutual fund portfolio is a very high risk method for producing income in retirement, but the client was not satisfied with that answer. We helped her reposition that money into strategies that eliminated the downside risk to her investment and would generate the reliable income she was seeking. Since the other adviser at least attempted to make adjustments, she is sticking with him for now. He did tell her he wasn’t comfortable with the allocations and this is outside of their usual strategy, so we are monitoring the portfolio there to make sure he stays on track for her.

Bad vs Good?

So how does this happen? Were these other people bad investment advisers? Not necessarily. Each of these folks used strategies and portfolios they were comfortable with. It appears that they each work mainly with people who are still working for years to come, and could afford to weather the ups and downs of the market, since their living expenses were being met by their work income, not portfolio income. People in that situation have far different concerns and objectives than someone who now has saved and invested all the money they will have for that purpose and now have to live on that money.

Individual Strategies Based on You & You Only

To put it another way, while working, you save and invest to build wealth. Once retired, your portfolio has a different role to play, replacing the income you earned from working! Most advisers don’t do well with both accumulation and decumulation. I am probably not the best investment adviser for people in their twenties, thirties or forties. My focus is on helping people who are in their last 10 years before retirement or the first 10 years after. This is a period when suffering significant losses can destroy your financial freedom and security in short order (Did you know anyone who retired in 2005-2008?). Those younger clients I help with setting up long term financial structures, habits and strategies, that will protect them from taxes and other unnecessary wealth transfers, but as far as investment strategies, I am probably not the best adviser for helping them create wealth through managing their investments.


How Can You Pick the Right Adviser for Your Situation?

First and foremost, decide what you want from an adviser.

  • Are you looking to organize your affairs, or just want some help picking mutual funds?
  • Are you a business owner looking to expand or save on taxes?
  • Does the thought of investing in the stock market make you nervous or anxious?
  • Are you trying to avoid risk or manage it?

These are the kinds of questions only you can answer yourself. Once that is done, then you might want to review a previous blog post of mine that explained what different types of advisers do (and don’t).

If you need help clarifying your thoughts as to what you want from an adviser, you can get a free copy of our Thought Organizer tool, which can help in the process. I’ll share a link to it at the end of this article.

It’s All About the Right Team for You

Having the right adviser on your side can make a huge difference in your financial security and peace of mind. Advisers don’t just make investments, but can save you money, reduce and manage risks, control taxes and generally return to you many times what they cost.

The other side is also true, having the wrong adviser for what you are trying to do can cause stress and hardship. When selecting an adviser, ask them:

  • To describe what is the demographic of majority of their clients.
  • Do they only work with people who have millions of dollars?
  • Do they work with business owners (very different needs than self-employed or employees)?
  • Young folks starting out?
  • Retirees?
  • This will help you to know if they have experience in the areas you have need. Ask them:

    • How they work with clients; frequent meetings or calls, consultative, analytical, etc..
    • Find out about their background.
    • Will they understand your situation?

    And finally, what is their process. During this conversation, take lots of notes and review them in a reasonable amount of time as you will still have memory of the meeting and how it felt to you, while reviewing your notes.

    To work successfully with and adviser, you must have confidence in their expertise, yet be comfortable that they are listening to your situation and concerns. You don’t have to be friends, but respect and trust are essential to your success. So ask questions and stay in touch with how you feel about the answers. There are many great advisers out there, make sure you are working with the one that is right for you.

    Download Your Free Financial Thought Organizer

    As promised, you can download a free copy of our Thought Organizer from the Home page of our website.  Scroll down to the middle of the page, just below my video and click the button. Here’s a link back to the Home page.

    After you fill it out, save it to your computer, and give me a call for a complimentary meeting to review it with you. Let’s find out together if I’m the right adviser for you.