Podcast Episode 293: Is Your Advisor Being Naughty or Nice?

Investing your money can be a scary thing, especially when you don’t feel like you have a good handle on the terminology and concepts. Many people turn to financial advisors to help guide them through their investments, but it’s important to make sure that they are actually helping rather than hurting. Let’s talk about a few scenarios where your advisor might be naughty or nice.

The first hypothetical we’ll ask Eric about is advisor meetings and how flexible they are with their time. Let’s say you meet once each year in November but ask to meet in May because you plan to retire. Should your advisor count that as the yearly meeting or give you the option to come back again in November? The better response would be to give the client the option to make the decision of whether to meet again. An advisor should be willing to provide that extra time, especially when you’re so near retirement.

If your advisor says they have an asset minimum, this might not be a bad thing.  A good advisor may require you to meet an asset threshold before they are willing to take on your account. This is because they may feel like their services would not be beneficial unless a certain level of assets is present in the portfolio. Many advisors specialize in certain things and that’s where this requirement could come in, which isn’t a bad thing because it might give you better results in the long run.

The third hypothetical is a client calls their advisor to say they want to invest a little more conservatively and the advisor takes it upon their self to make the changes for the client. This is one we’d classify as naughty for a few reasons. First, we always call the client back to make sure it’s actually them and the request is accurate. And second, the client should have input in the investment decision or at least know what the changes will be before they occur. In the end, this seems a bit lazy by the advisor and it’s doing the client a disservice.

These scenarios highlight just some of the things to watch out for when it comes to financial advisors. Ultimately, the sign of a good advisor is someone who puts the client’s interests first and offers advice in line with their goals and risk tolerance.

If you want to discuss these planning items or any others, take advantage of our complimentary Money Map review and we’ll get the process started.

Here are a few of the things we discuss in this episode:

1:00 – How should your advisor be handling meetings with the client?

2:46 – If an advisor tells you they have an asset minimum, but is this actually nice?

4:28 – Should your advisor go ahead and make investment changes for you?

6:04 – On the Case with Heath