What To Expect In A Financial Advisor

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AverageJoe was a financial advisor to about 150 families for over 15 years and managed around $60M. Now he writes at the creatively named “Average Joe’s Money Blog” and is co-host of the Two Guys & Your Money podcast. Check out his show on iTunes.

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What to Expect in a Financial Advisor

Uncle Joe’s Story Hour:

Mary had always wanted a financial advisor. It sounded great….working with a pro. She told me six months ago her story:

“I imagined someone who would kind of hold my hand and walk me through the tricks I didn’t know. It was exciting.”

After she found a guy in the phone book, she gathered her credit card statements, student loan information and 401k stuff for the meeting.

When she arrived, she couldn’t have been more disappointed. The “advisor” only wanted to talk about how much she had saved and how much insurance she had. When she asked about her credit cards, he told her that if she saved more money and hid it better the debt would take care of itself. When she asked too many questions, the advisor told her that he couldn’t give her more information without her first paying a fee.

It’s been three years and Mary still has credit card debt, still has budget problems, and sadly, no real insurances or savings plan.

It doesn’t have to be that way.

The good news is that there are advisors out there who take care of the big picture. Sadly, you won’t be able to find them just by searching for a few letters like CFP or ChFC (two common accreditations among financial advisors). Here are some things that I recommend when hunting for an advisor who’ll help you toward your goals:

1)  Look for someone who wants to solve your problems, not their own. Mary’s “advisor” wanted to know how much she had saved and her insurance situation because he makes money by managing assets and selling insurance products. He’s so busy focusing on his own paycheck that he hasn’t thought at all about how to best communicate with Mary or solve her problem.

This approach reminds me of the old Ameritrade commercial where an older guy is sitting with a young advisor. The advisor says, “I’m thinking villa in Tuscany.” The older guy leans forward and says, “Yes!” The advisor continues, “I’m imagining a brand new boat.” The older guy gets excited. “Yes!” The advisor exclaims, “I’m thinking retirement at age 50!” The older guy’s face contorts, “But I’m 54!?” The advisor looks across the desk and says, “…oh, we were talking about you?”

2)  Find advisors via referrals, not the phone book. Great advisors don’t advertise much. You know why? They don’t have to. If you’re looking for a resource via advertising channels you’re either going to get the new advisor who’s just starting out (ready to be a guinea pig?) or one who can’t keep a stream of referral clients coming through the door.

The only times I advertised in my career was when a client wanted something to help their local cause. If my client’s kid was in a play, I’d buy an ad. I didn’t care about a return on investment….I wanted to invest in my relationship with that family.

3)  Interview advisors who listen, not talk. I had some “friends” in the business who were so sure they knew everything that they never really addressed the client’s true problem. Only advisors who actually listen to you can solve your problem.

If I didn’t have a specific reason to meet with a client, a general meeting would start with a few questions on my part. “What are your biggest concerns right now? When you leave here, what do you want to most know? Anything important happen in your financial life since we last met?” Only once I heard the answer to those questions could I begin to diagnose any issues they might have.

Meeting Frequency

Some of my clients never wanted to look at their overall plan. Others would have lived at my office if I’d let them. Find out how often your potential advisor will meet with you and what the price is for this contact. If it feels like the advisor wants to meet more often than you’d like, ask what will happen at the meetings. You might be surprised to find that a good advisor has an agenda full of ways to make or save you money that you didn’t expect.

With technology advancements, a face-to-face meeting, while nice, isn’t always necessary. I began using telephone conferences, WebEx meetings and email exchanges to have more frequent “touches” with each of my clients and meet any financial issues head-on.

Your #1 Goal

Simply put, you need to be comfortable. If this person is going to be your coach or advisor, you’re going to have to enjoy meeting with him/her and be excited about accepting calls from them. If something feels off about the person at all, don’t hire the advisor! Sure, they might know a ton about money, but if you don’t fit well, you’ll waste money because you won’t take their advice, no matter how savvy it might be.

iHB Thoughts: Joe, these points are spot on! It reminds me of how Dave Ramsey always talks about looking for a professional who has the “heart of a teacher”. My advisor is low touch, but keeps me informed, which I like. Honestly, I could probably do some shopping around and be a bit more involved, but all I have is a Roth IRA which I haven’t contributed to in a few years (I know, I know, bad Jacob!) But I love the idea of looking for someone who can help your whole financial picture, not just pad their wallet by selling you products.

If you were hiring an advisor, what would you look for? I’ve left out some of the obvious things you read (experience, credentials, etc.). Feel free to fill in the blanks in the comments:

Jacob Wade

Jacob Wade

Jacob Wade has been a nationally-recognized personal finance expert for the past decade. He has written professionally for The Balance, The Spruce, LendingTree, Investing Answers, and other widely-followed sites. 
He’s also been a featured expert on CBS News, MSN Money, Forbes, Nasdaq, Yahoo! Finance, Go Banking Rates, and AOL Finance.

In 2018, Jacob quit his job and his family decided to sell everything (including their home) to take off on an adventure. They traveled the country in an RV for nearly 3 years, visiting over 38 states, 20+ national parks and eventually settling in the sunshine state!

27 thoughts on “What To Expect In A Financial Advisor”

  1. This is great! We don’t have a financial advisor right now because the ones we did have in the past always looked out for their own interests and wanted to sell stuff. I would definitely be willing to listen to more advice from someone if I knew for sure that they didn’t have their own agenda.

    • Thanks, Holly. EVERY advisor has an agenda….fortunately or not. The key is to discover the agenda. Here was mine: I wanted to work with families who wanted to pay my fee and focus on the holistic big picture stuff (that I liked to handle…setting milestones, planning, fixing the budget and eliminating threats to the plan like debt, lack of diversification, no estate plan, and the wrong insurances) and not worry about “selling” junk to people who didn’t need it. SO, I repelled people who didn’t want someone to look at EVERYTHING, and attracted busy, smart people who wanted an expert in their corner to look at the whole picture. Because my fees weren’t low, I also wasn’t right for people with low incomes.

  2. Great post Joe! So many advisors out there are simply looking to line their pockets and do not benefit their clients one bit. We don’t have an advisor as I handle all of our investments, but you want someone that’s going to care about you and what your goals are. You want one that will be real with you and care for your money as it were their own. Great point on #2! Good advisors don’t have to advertise, their ads come by word of mouth. If they’re good, then their clients will be more than happy to tell their friends about you.

    • Thanks, John. Getting a good referral is clearly the way to go. Something that happened in our office: new advisors would take turns getting the “call-ins” from ads. Anyone calling the office I worked in (about 30 independent advisors all shared a single space) had a 100% chance of getting one of the “new people.”

  3. Funny, someone just emailed me what they thought was an inconsistency (but it isn’t). My friend Mary told me the story six months ago (well after I’d stopped practicing) but the event happened three years ago. Hope that clears up any confusion. I could have written it more clearly!

  4. We have a financial advisor but really I’m just learning about all of this stuff as I never had one in the UK. It’s hard to know what is right and wrong and who is trying to help you or only make money from you. My father in law says my money is safer in my own hands lol.. not sure about that ha! Our advisor asks to meet with us at least once per year and he does listen. As I go along I’m sure I’ll learn more. Mr.CBB

    • I think your blogging, CBB, is the best way to continue to gain traction!

      Your advisor may not know what is right or wrong. There were many times I had to give my clients a couple choices because every plan had risks. I just wanted them to know the downside first.

  5. Spot on! Although, credentials are important they are not enough. That’s why your point on finding an adviser who wants to solve your problem resignates with me. People want their problems solved, earn a higher return based on their tolerance , and save money. Maybe that’s why I work well with people, I want to solve their problems

    • You hit it on the head, Ornella. People who get into financial advising for the money often wash out….people who get into it because they like problem solving usually find plenty of ways to earn a living.

  6. Now I get it! I think that for many people the holistic approach is critical. While there are some people that have all of their finances in order and just need to know where to invest their money, many more of us don’t. Having someone that makes sure every aspect of your finances is looked after is huge.

    Did you find that you had people from all income levels following your advice or just wealthy people, or just middle class people?

    • That was the sad part (but an economic reality for me at the time). While there were clients who weren’t wealthy who NEEDED my advice, wealthy people would increasingly pay my fees. So, in the interest of earning a nice income, I increasingly only worked with wealthy people OR people with high incomes who were on their way to wealth. The sad part was that I enjoyed helping regular people get out of debt and put a plan together….but I wasn’t making any money serving those clients.

  7. Wish I had read this in the morning instead of now! I had a first meeting with a fee only financial planner this afternoon and it went pretty well. I know that next time I need to come in with a bit more focus on what specific action points I want to address in the short term rather than long term ideals.

    • This afternoon! How’s that for timing? Glad to hear it went well. You’re right: it’s important to have some clear objectives when you go in to the meeting. That’s the way to get more “bang for your buck!”

  8. Great post, Joe! Thanks for sticking to the non-obvious.

    We have never met with a financial advisor but I’m thinking we might meet with a fee-only person once when we transition from grad school to the real world.

    • Thanks, Emily!

      There are some real downsides to fee only planners (I’m prepping a piece on this for my site, in fact). While people don’t want fees to get in the way, fee only planners have zero incentive to make sure you follow through on your plan. In fact, I wish I could find the study, but the one I’m thinking of showed that fee only planners had the lowest implementation of any of the three types of planners. I think you’ll be fine because you’re a self starter, but many people get the paper and do nothing with it.

  9. I’m learning quickly that just looking in the phone book or on Google is never the way to go when it comes to hiring anyone.

    I’ve hired my massage therapist that way and she’s not that great. She didn’t even show up to our appointment last week. I’ve hired other people that way as well; it ends up biting me every time. Doing research is the way to go.

  10. Great post A. Joe. I think it would be kind of fun to be a financial advisor, but I’m sure you get blamed for all kind of stupid crap people do or don’t do. I have had a talk with a financial advisor before and all she wanted to do was sell me annuities. I don’t know enough about those, but it didn’t seem like the best plan, so I bolted. I hope I’m doing OK. I guess if I don’t die broke, I’ll know I did.

  11. Probably the best post on finding a financial advisor (of which I don’t have) – but now that I’m in my 30s I’ve been thinking about this more and more. Thanks Joe for an informative article.

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  14. Very good insights about financial advisor. Financial advicor is really useful when it comes to financial related problems. They are the one who give an professional advices to clients.


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