Figuring out when it might be time to change your financial advisor
Finding someone to guide you through the very delicate process of managing your money can seem like an uphill task and for this, having a financial advisor on hand can be a good idea. When you have individuals who are experienced in and know the ins and outs of finance, navigating through periods when you feel overwhelmed by the burden of heavy financial decisions could get much easier. Why slog through it all on your own?
Financial advisors are supposed to be there to provide support and suggestions, recommending and rendering financial services to clients based on their preferences and personal situations.
Financial advisors must complete specific training, be licensed to provide advice and have the best in mind for those that rely on them. Even with all this, however, as with other industries, a small number of unscrupulous characters can really spoil things for the ones who are good at what they do.
Here are a few signs that you might be dealing with one of these unscrupulous characters and that it might be time to switch financial advisors.
Your advisor just doesn't listen
Do you make numerous requests and suggestions only to be brushed off? Clients might fall for fast-talking advisors in fancy suits and impressive offices, however, when they do decide to opt for their services, they begin to realise that nothing they say is taken into consideration.
They fall deep into a "doctor-patient" complex (where you don't ask the doctor any questions and just take the prescription he or she gives you). If this scenario sounds familiar, you may want to reconsider your arrangement. Financial advisors should listen intently to their client's needs and preferences and cater to their clients’ own situations.
You're too intimidated to communicate
If you are too afraid or intimidated by your advisor (to the point where you don’t even feel like calling him or her up), this may be a warning sign that the relationship is not sustainable.
You might feel that your advisor is simply too busy for you and you don’t want to disturb him or her. Maybe you feel that you aren't worth his or her time. If this is the impression that your advisor has left you with, then he or she has failed miserably at an integral aspect of the job, customer service.
Advisors need to be warm and inviting in their approach with clients. After all, it’s a matter of trusting someone with your money. If you can’t communicate openly with the expert that is supposedly handling your finances, then something is terribly wrong.
Your advisor wants to put all your eggs in one basket
Investment can be a tricky part of financial prosperity, particularly because of the risks that could potentially be involved. With that being said, advisors tend to guide clients through the safest and most rewarding investment strategies that produce results in the long run. This can often involve diversification (spreading out invested capital into different funds and initiatives). Diversification is a fundamental principle of any investment portfolio.
It reduces risk and enables flexibility (both of which are crucial for retirement purposes). If your advisor insists on putting all your money into one investment, be cautious. It may work in some cases, however, it should generally be viewed as not being in your best interest.
They don't keep you in the loop
Financial advisors must be on top of things at all times or at the very least, inform you if there's a problem. Abrupt changes related to your portfolio, important investment decisions and consistent reporting are all things you should be informed of. If your advisor is keeping you in the dark until the last minute or if he or she has been sending you incomplete reports, it may be time to look for a more reliable replacement.
The sad truth is that not everyone is looking out for your best interest. Some people are manipulative and cunning, are looking for ways to take advantage of you, are trying to make quick cash or to put your wellbeing in danger. When thinking about who to trust with your money, look out for the red flags that your advisor may be up to no good and know when to leave before it’s too late. If you’re looking at switching to a more reliable advisor, I have decades of experience and am here to help. Get in touch!