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Written by: John Drachman
Turnabout is fair play. If advisors can fire clients at will, investors too get a vote. Every relationship is a two-way street. A change in the advisor’s firm or your behavior can sometimes lead a professional to make a break. From your side of the equation, there are four clear signs that the moment may be right to call it quits.
- Missing-in-Action: Without timely communications and accessibility, a productive business relationship is impossible. Weakening relationships go south quickly where money is involved. Meanwhile, downbeat emotions like anger and disappointment can ferment into mistrust. You turned to an investment professional for advice in the first place. If you aren’t receiving it, you’re not getting what you paid for. Time to say “good-bye.”
- Take a Number: Financial advisors have to know a lot about their clients to be effective. To personalize each client’s experience, advisors must know their clients’ specific financial goals, risk tolerance and investment horizon. Without adequate understanding of your objectives, an advisor will default to products and advice they’re already recommending to others; or worse, what they are already selling.If you’re being treated like a stranger, your advisor hasn’t taken the time to know you. Time to shop around.
- Speaking in Tongues: Investing is complicated enough without your advisor burying you with terms and concepts that are indecipherable to a layperson. Some financial advisors may be well-meaning but inarticulate about why you should be following one investment path rather than another. If simple and direct is a foreign language to your advisor, it’s time to find someone new: a professional who can provide you with the information clarity you want to make the decisions you need.
- Too Pricey: Have your returns been diminishing? Time to take a closer look at the fees and expenses you’re paying. Many financial advisors provide their clients an Investment Policy Statement that serves as a kind of investment blueprint that establishes investment goals, the timeframe for achieving them as well as the estimated costs of maintaining, monitoring and modifying a portfolio. It’s the advisors responsibility to make sure you don’t overpay for similar opportunities that may be available for less. Check your monthly or quarterly statement. If your costs of investing look too high and your advisor can’t explain them; remember it’s your money – and make an exit.
The Bottom Line
As much of a maze as the investment world can seem, it’s the advisor’s job to guide non-professionals like you through the thicket of possibilities to the investments that are most suitable for you. Like any professional service, advisors are only as good as the value they provide. If yours has stopped returning your calls, treats you like a number, speaks in riddles or over-charges, take a deep breath and make the break. Then, find a pro willing to travel the proverbial “extra mile” – while wearing your shoes.
John Drachman is a contributing writer to MyPerfectFinancialAdvisor, the premier matchmaker between investors and advisors. John is an IABC award-winning writer, who applies his 30 years of financial marketing experience toward advancing the dialog between investors and investment professionals.