Signs You May Be Working With the Wrong Financial Advisor

Jay Gershman |

Is your financial advisor helping you make the right decisions to help you reach your financial goals efficiently? When it comes to getting help with your savings and investments, you should have a financial advisor on your side that you trust and understands your goals for the future. You may not realize your advisor isn’t the best fit for you though. If you have any speculation, here are a few signs you might actually be working with the wrong financial advisor.

Proper Credentials

Hiring someone to handle personal and confidential information such as your finances is a responsibility you want to put into the right hands. Your financial advisor should have the proper credentials in order to understand certain standards and regulations. You may want to ask if they’ve passed their CFP® (Certified Financial Planners™ Exam), as this requires testing and a distinct knowledge of responsibilities of being a financial planner.

Along with having the proper credentials, make sure they are a reputable financial advisor. Do some research before you hire, you can use a broker check website to see if any clients have left prior complaints about your advisor.

Financial Strategy

An advisor should be able to listen to your needs and provide you with a plan that works for your individual interests. If they come up with a strategy and can’t back up how they got to it, they merely could be making up numbers to sell their strategy. All advisors should have an investment process that determines how they are making investment decisions for you.

So, if it seems like they aren’t providing the right sources or information in regards to your investments, then they may not be certified or up to date on how to implement certain policies, and you should probably walk away.

Pushing Products You Don’t Need

When advisors start offering products their company sells, it’s important to be open to suggestions as that is their job to advise your finances. But if they are swaying from your goals and trying to push products at you that are too expensive for your financial interest, then they may be getting paid via commission. Most reputable advisors get a flat fee no matter what happens with the investment, so you may want to ask them to disclose how they are paid.

Leaving You in the Dark

If you are not hearing back from your financial advisor with quarterly and annual reports, you might want to start asking questions. These reports should put into perspective the return your advisor is getting on your investments, and what progress you are making such as any gains or losses. They also should be informing you on what your investments have earned. As it is your money being invested, you should be aware of how well you’re performing compared to a benchmark. Meeting in person is a more effective and personal way of having a good relationship with your advisor, so if they are not taking interest in keeping you up to date on your finances, then they probably aren’t going to be reliable in updating you on any changes in your investments.

They Are Not Concerned About Your Needs

Having a good business relationship with your financial advisor is pertinent to them understanding your goals and needs so they can make proper financial recommendations for you. A reputable advisor is going to take the time to ask relevant questions such as:

  • How is your health?
  • How much credit card debt do you have?
  • Do you have a will or a trust?
  • Do you have an emergency fund?
  • How are you planning on taking care of college funds?

As mentioned before, if they only care about getting you to invest in products, or tell you to put all your money in one investment, they most likely are focused on their commission, not your best interest.