How do you know if your good at your job? How are you graded?
Financial advisors today have it easy if they are only responsible is to make you money. The market is unbelievably good. They could make you money and give you terrible financial counsel.
Here's one major thing you need to be sure you are hearing from your advisor today outside of growing your wealth:
Making Money Is A Good Thing. But, Keeping It Safe Is A REALLY Good Thing.
I have a HUGE pet peeve about financial advisors role. This is a mountain top, that I'll stand on and shout until my voice is gone. So, many people get it mixed up when evaluating if they're with a good financial advisor.
Before you answer the question "How?" you need to answer "Why?".
How do you feel about your current advisor? Chances are you've been with them for some time and likely feel pretty good.
The better question is why do you feel how you do.
Do you like your financial advisor because:
- You've seen good returns on your investment?
- You feel like you can trust them?
- Your family and friends use the same person?
If you're getting a good return on your investment, that's not enough to be happy with your investor! Everyone is having HUGE returns!
Your golden retriever could have picked a good portfolio over the past few years.
So, What Matters When Choosing The Right Financial Advisor Today
Most importantly they must be a fiduciary. You have to know the motivation behind their advice.
If your advisor today isn't prepping you for a drop -- you need to be concerned.
Not everyone will agree with me, but, in today's economic circumstances, you should base your opinion of your advisor on how well they are preparing you for the bad times not the good.
If the market dropped tomorrow can you tell me how much you would lose?
We're sitting at the top. And it's a nice view, but we have to accept the reality of what is coming. That is the job of your advisor.
Your financial advisor needs to be guiding you (and you need to be asking them) about what is coming and how to prepare for a drop.
Don't let circumstances give you a false sense of security.
It's an incredibly important time to be ready. Go and have the hard conversation with your advisor.
One of the more common reasons I hear people want to switch from their advisor are the fees...
We've talked about this before.
Fees? Are another pet peeve of mine that I will touch on briefly.
I recently met with someone and they were paying 1.5% fees to their advisor. Plus, the mutual funds they were invest in were class C mutual funds.
That means this person was paying over 3% in annual fees -- killing the growth of their portfolio.
Don't Overpay for Good Advice.
Don't Accept Bad Advice.
Don't Equate More Money With Good Advice.