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Breaking up is hard to do, especially when it means firing someone on your Money Team, such as your financial advisor.
In this podcast episode, which is Part 2 of Hiring and Working with a Financial Advisor, I'll cover how to make a good choice when hiring an advisor, tips on cultivating a positive long-term relationship with them, and red flags that are sure signs of when to fire an advisor. Let's dive in!
Ask Good Questions in the Hiring Process
Asking good questions when you hire a financial advisor means you'll be less likely to fire them in the future! Treat it like a job interview - because it is (and you're the boss)! This person is auditioning for a part in the production called "Your Money Team!" Interview at least two advisors, and be sure your spouse or partner is involved in the process.
The top three questions you MUST ask in the hiring process are:
“How do you get paid, and what am I getting for the fee?”
“Do you have clients just like me, in similar life situations?” You don’t want to be your advisor’s “unicorn.”
“Do you follow a fiduciary standard?” A fiduciary must always act in the best interests of his or her clients and place clients’ best interests before his or her own.
When making your final decision, look at the facts AND trust your gut. Use FINRA’s Broker Check to make sure your advisor isn’t in any legal or financial trouble.
FREE RESOURCE ALERT! Download my handy checklist of the 10 Questions to Ask Your Next Financial Advisor to take to your interviews!
Cultivate a Positive Long-Term Relationship with Your Advisor
Meet and communicate regularly with your financial advisor! Be honest with them about what’s going on in your finances and your life. Share family and life situations, along with your feelings about money. Financial decisions can change based on these factors.
The more information they have, the better job they will do for you. Ask them questions when you don’t understand or need clarification. He/she should be happy to help educate you and recommend resources to expand your knowledge.
When to Fire Your Financial Planner
If you feel brushed aside, ignored, or disrespected, these are big red flags. If you ask questions or challenge a recommendation, and it’s met with defensiveness, dismissiveness, or talking in circles, that’s a problem. (That's exactly what happened to one of the members of the Wealthy Woman Book Club™. Watch or listen to the episode to hear her story.)
Beware of advisors peddling “once in a lifetime opportunities,” which are the “next Apple or Amazon.” Be careful with investments where money is invested outside of your brokerage account. Yes, the advisor is the expert on investing, but it is YOUR money, and you have the final say.
Breaking up with your advisor can feel uncomfortable, but it will hurt your financial bottom line if you don’t! Don't believe me? I tell the story in this episode of MY breakup with a former advisor six years ago. You'll be shocked when you find out how much money it would have cost me to stay with her!
If you wouldn’t re-hire your financial advisor, it might be time to fire them!
Hiring a financial advisor is a big and important decision. Do the research and take the time to hire one who deserves a long-term position on your Money Team!
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