Ten Things About Your Financial Advisor That Should Make You Go “Hmmm…”

Jay Gershman |

Jay L. Gershman, Retirement Visions LLC, West Hartford

It’s very common to form a strong emotional bond with your financial advisor after years of working together. However, not all advisors provide the same level of service, offer the same quality of recommendation, or are paid equally for that matter. In most cases, people swallow what has become a ho-hum relationship simply because it’s too overwhelming to start over again. What I urge you to remember is that your future is in their hands. It’s better to find a person who will work hard for you than settle for someone who rests on their laurels knowing they have your business in the bag.

Here are 10 signs that your financial guru may no longer be a fit. 

  1. You met at a restaurant. Starting your relationship by accepting a free dinner can often lead to high commission product sales. While workshops can provide valuable information, beware of “free” meals.
  2. You bought an annuity. While annuities aren’t all bad, buying an annuity from a newly hired advisor may be a bad sign. Most advisors do not disclose that many annuities can pay the representative as much as 7% upfront with no guarantee of future service.
  3. Your first meeting was more about your investments than your goals. When you recall your first meetings with your advisor, did you discuss your entire financial situation and address all areas of your financial life or just your investments? When someone focuses only on money, they may not have all of your best interests in mind.
  4. You haven’t checked to see if your advisor has had any complaints. While not all complaints should preclude you from doing business, going online to do a Brokercheck might help you decide who you’re trusting your money with.
  5. You can’t remember the last time you had a real meeting. Most good relationships require proactive planning and reviews. While many people have little or no interest in what’s happening behind the scenes, waiting until the next correction to call a meeting is not recommended. If your advisor isn’t contacting you to meet at least once a year, you might want to consider your options.
  6. You don’t know what your investments have earned. Most investment statements show values but not all illustrate returns. Does your advisor show you how your investments are doing compared to the benchmarks? You can’t know how well you’re performing without proper perspective.
  7. You’re always admired how upscale the office is. While the topic of cost is complicated, knowing what you pay for and understanding all expenses associated with managing your investments is a great exercise. It may be helpful if compared to other advisors.
  8. You’ve been assigned to a new advisor. If your advisor reassigns you to another advisor, you should ask for their credentials. Are you getting the quality of advice you previously did? Why has there been a change in the first place?
  9. You don’t know if you’re on track. If you’re driving to a destination, it is important to know your speed, the route and what time you will arrive. If you’re going to be late, is it worth speeding? That’s what planning for the future is like - it should be based on how your investments are doing.
  10. You’re not sure what happens if your advisor meets his/her ultimate fate. Does your advisor have a succession plan? Anyone giving advice should have a plan for themselves and you should be aware of it.

Jay Gershman is the Owner and Founder of Retirement Visions LLC, a West Hartford-based financial planning firm that focuses on comprehensive life planning and financial management. For more information, visit www.allset2retire.com. Information and advice are for guidance only and opinions expressed belong solely to the author. Securities offered through Securities Service Network, LLC. Member FINRA/SIPC. Fee-based services are offered through SSN Advisory, Inc., a registered investment advisor.